Artemis Resources Limited
and its controlled entities
Annual financial report
for the year ended
30 June 2018
Artemis Resources Limited ABN: 80 107 051 749
Telephone: +61 8 6319 0000 | Email: info@artemisresources.com.au
Suite 1 11 Ventnor Avenue, WEST PERTH 6005 |
https://artemisresources.com.au
CONTENTS PAGE
Chairman’s Letter
Review of Operations
Annual Mineral Resources Statement
Tenement Schedule
Corporate Governance
Directors’ Report
Auditor’s Independence Declaration
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Financial Statements
Directors’ Declaration
Independent Auditors Report
Additional Information for Listed Companies
Corporate Directory
3
4
18
21
22
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31
32
33
34
35
36
59
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64
67
Annual Report for 2018
Page 2
CHAIRMAN’S LETTER
Dear Artemis shareholders,
The Radio Hill treatment plant has now become a key asset of the Company moving forward, as the past year has seen
very significant exploration success on many of our West Pilbara projects. Our tenement package now covers nearly 2,400
km2 and Radio Hill will be instrumental in moving Artemis from an exploration company to a production focused
company.
The refurbishment and expansion programme of the Radio Hill sulphide processing plant has made considerable progress
during the year with the Group finally receiving approvals to install and commission a new tertiary crusher and gold circuit
alongside the refurbished crushing and grinding units. The plant now has an approved Stage 1 throughput capacity of
500,000 tpa of gold ore.
Our major challenge this year has been prioritising our many resources covering a diverse spectrum of metals (from
cobalt, gold, copper, nickel and zinc), and trying to identify which of our many projects has the most economically robust
potential.
Our star exploration performer has undoubtedly been the discovery of Carlow Castle, which in the board’s view, is a
major new cobalt rich resource for Australia and has the potential of becoming a real company maker for Artemis. The
Carlow Castle Project delivered its maiden JORC mineral resource estimate in January 2018, and has produced excellent
cobalt, gold and copper exploration drilling results since. We are working on finalising an updated JORC resource over
the coming months and we are also making plans to significantly up our exploration efforts here before the calendar year
is out. The view by key analysts is that the demand for Cobalt, a key metal in lithium-ion batteries used to power electric
vehicles (EV’s) is expected to surge in the next few years.
In the 50-50 joint venture for conglomerate and/or paleoplacer style mineralisation with Novo Resources Corp (Novo),
early bulk sampling results have shown very promising gold grades from Purdy’s Reward and an approved Joint venture
exploration budget of $5.4m, commencing 1 July 2018, should hopefully see further success on this exciting project.
Artemis sold its 4 million Novo shares to Kirkland Lake Limited (ASX:KLA) for AUD $20.3 million in May 2018, providing
the Company with the cash to further develop its project portfolio and resulting in a cash balance at year end of
approximately $27 million.
Our strategy of developing our own gold resources is advancing, with exploration work determining that conglomerate
gold potential extends from Purdy’s Reward, through Novo’s Comet Well into the Group’s Comet Well West tenements.
A further 14 km strike length of conglomerate gold mineralisation has been identified on Artemis’s 100% owned Mt
OscarWits Project. Further drilling was undertaken at our Weerianna Gold Project (which has a JORC (2012) compliant
Inferred Mineral Resource of 1Mt at 2.2 g/t Au for total contained metal of 70,000 ounces of Au) and a new JORC resource
is targeted here shortly.
We have also seen excellent drilling results from our Whundo Copper/Zinc Mine and at the Radio Hill
Nickel/Copper/Cobalt Mine, and new JORC resources should be reported on these assets shortly. Both projects are in
close proximity to the Radio Hill processing plant.
The Board and management team were strengthened during the year with the appointment of H.H Sheikh Maktoum
Hasher al Maktoum as a non-executive director and Wayne Bramwell, an experienced mining executive, as CEO.
I would like to thank our shareholders for their ongoing support and the expanding Artemis team for their ongoing
commitment. We look forward with confidence to the year ahead.
Yours sincerely
David Lenigas
Executive Chairman
28 September 2018
Annual Report for 2018
Page 3
REVIEW OF OPERATIONS
Artemis Resources Limited (“Artemis” or “Company”) is pleased to outline the Company’s progress for the financial year
ending 30 June 2018. There are additional comments included on the Company’s activities from year end to the date of
this Annual Report.
The Group now has prospective base, battery and precious metals assets in the Pilbara region of Western Australia over
an area of ~ 2,400 km² (Figure 1).
Artemis owns 100% of the 500,000 tpa Radio Hill processing plant and infrastructure, located approximately 35 km south
of the city of Karratha. The Company is evaluating 2004 and 2012 JORC Code compliant resources of gold, nickel, copper-
cobalt, PGE's and zinc, all situated within a 40 km radius of the Radio Hill plant.
The following is a summary of the significant level of activity undertaken over the reporting period.
Figure 1: Artemis’s Projects in the Karratha Area and Proximity to Radio Hill Process Plant
Annual Report for 2018
Page 4
CARLOW CASTLE
In January 2018 the Company announced the first JORC Code (2012) compliant resource estimates for the 100% owned
Carlow Castle Project, which includes (Figure 2) Quod Est, Carlow Castle South and Carlow Castle South-East
(Cobalt/Gold/Copper) Prospects, located about 20 km southeast of Karratha in the Western Pilbara Region of Western
Australia are outlined below. Carlow Castle is located only 30 km north-east of Artemis’ Radio Hill processing
plant, via gazetted roads.
Figure 2: Quod Est and Carlow South areas and geology.
A total Indicated and Inferred resource (Table 1) of the Carlow Castle Project, within the lode wireframes of
Quod Est, Carlow Castle South and Carlow Castle South-East, which are based on 0.5 metal content lower cut-
off of 4,500,000 tonnes at 0.9 g/t Au 0.07% Co, 0.4% Cu & 1.3 g/t Ag, containing 130,000 ounces of gold,
18,000 tonnes of Cu, 3,150 tonnes Cobalt and 188,000 ounces of Silver, was estimated by Mr Phil Jones from
Al Maynard & Associates (“AM&A”).
Table 1: Global Resource estimate for Carlow Castle Project, which includes Quod Est1, Carlow Castle
South and Carlow Castle South-East Lode (Phil Jones, 2018; AM&A).
1 ASX release dated 19 January 2018 “First of the Cobalt/Copper/Gold JORC Resources at Carlow Castle- amended “
Annual Report for 2018
Page 5
DescriptionCategoryMillion TonnesAu (g/t)Co (%)Cu (%)Ag (g/t)Carlow Castle SouthInferred3.20.90.060.41.3Carlow Castle South-East LodeInferred0.71.20.060.41.8Quod EstIndicated0.31.20.210.51.4Quod EstInferred0.20.60.070.31.0TOTALIndicated0.31.20.210.51.4TOTALInferred4.20.90.060.41.3TOTAL Indicated +Inferred4.50.90.070.41.3
The Company commenced a further drilling programme in July 2018 targeted at infill drilling to significantly increase
resource definition in the Carlow Castle South deposit area. This programme generated some very high grade cobalt
intercepts with attended high copper and gold assays (6.5m @ 23.44g/t Au, 2.32% Co and 10.35% Cu from 47m in hole
18CCAD009)2.
The first quarter in 2018/2019 will continue to focus on extension and infill drilling at Carlow Castle to build on the
significant exploration results achieved across the base and battery metal portfolio at this project
CONGLOMERATE GOLD
ARTEMIS-NOVO CONGLOMERATE GOLD JOINT VENTURE
The TSX Venture Exchange accepted the Definitive Agreements between Novo Resources Corp. (“Novo”) and
Artemis in August 2017 following which Novo issued Artemis with 4,000,000 common shares in Novo.
The Agreement allowed Novo to farm-in to 50% of gold (and other minerals necessarily mined with gold) in
conglomerate and/or paleoplacer style mineralization in Artemis’ tenements within 100km of the City of
Karratha, including at Purdy’s Reward (“the Gold Rights”). The Gold Rights do not include Artemis existing
JORC compliant Resources and Reserves, gold which is not within conglomerate and/or paleoplacer style
mineralization, and minerals other than gold. Artemis’ Mt Oscar tenement is also excluded from the
Definitive Agreements.
Novo released an update on results from Purdy’s reward on 14 February 2018 with the bulk sampling results,
as received from Novo, showing very high grade gold results. Gold results from the basement dolerite unit
grading up to 4.1 g/t were encouraging3.
Further work undertaken by Novo resulted in an improved understanding of the extreme nuggety effect at
the Purdy’s Reward, which together with increasing the bulk sampling size and a new reliable and consistent
processing path now available through SGS Minerals will allow the JV to more accurately define the extent of
the gold mineralisation in these conglomerates and the surrounding rocks.
Artemis, paid $2 million to the end of June 2018 towards the overall JV exploration programme and
subsequent to year end the JV partners agreed to a $5.4 million exploration and work programme budget for
the year beginning 1 July 2018.
In the first four months of the new year the JV will focus on bulk sampling, diamond drilling and costeaning
activities, primarily at Purdy’s Reward. Large bulk samples will be collected and treated to provide necessary
gold grade data for a mineralisation report, an important step toward converting the current exploration
license to a mining lease.
In addition, environmental and heritage studies will be undertaken in conjunction with similar work at Novo’s
nearby Comet Well joint venture in order to move the collective area towards trial mining.
COMET WELL WEST CONGLOMERATE GOLD
Artemis exploration work has now determined that conglomerate gold extends from Artemis’ Purdy’s Reward
Conglomerate Gold Project westwards through Novo’s Comet Well and in to Artemis’ Comet Well West
tenements (Figure 3).
Artemis has identified ~67km of conglomerate and Mt Roe Basalt contact immediately west of Novo’s Comet
Well.
The Company has recovered 6kg (193 oz) of gold nuggets from 47K Patch and has also identified fine gold with
the gold nuggets recovered from this tenement.
2 See ASX announcement dated 25 July 2018
3 See ASX Announcement dated 15 February 2018
Annual Report for 2018
Page 6
A Programme of Works (POW) was submitted to commence extensive exploration on Artemis’ Comet Well
West conglomerate gold targets.
Figure 3: Conglomerate contact at Purdy’s Reward through to Comet Well West and down to Munni Munni
MOUNT OSCARWITS
Mt OscarWits (Figure 1) is an approved Exploration Licence covering 117.8km2, and is located about 35km
south-east of Karratha and 16km north-east of Purdy’s Reward conglomerate hosted gold project. Gold
nuggets have been recovered by metal detecting at the Fairmont Prospect from the Mt OscarWits
conglomerate trend.
During the year Artemis completed geological mapping, rock chip and stream sediment sampling at Mt
OscarWits which identified extensive sequences of principally quartz and chert clast conglomerates with
anomalous gold mineralisation confirmed over a 14km strike length. The discovery of these watermelon seed
nuggets adds to the further prospectivity of Mt OscarWits conglomerate gold potential.
WEERIANNA – GOLD
The Weerianna Gold Project is located about 35 km north-east of Artemis’ Radio Hill Plant site. Pit
optimisations undertaken during the year on the Weerianna Gold Project’s Mineral Resource were positive.
The optimisation was done to potentially prioritise initial plant feed in to Artemis’ Radio Hill Processing Plant
for the first few months after its re-commissioning.
Annual Report for 2018
Page 7
Weerianna is on a granted Mining Lease and has a current Inferred Mineral Resource classified and reported
in compliance with the JORC Code (2012) of 1 Mt at 2.2 g/t Au for total contained metal of 70,000 ounces of
Au4. The current resource outcrops at surface and remains open at depth and along strike.
21 Reverse Circulation (RC) drill holes for 1,758 metres were drilled at Weerianna in April 2018 to infill drill the
deposit and test for extensions of the mineralisation along strike and down dip.
Artemis is working on submitting a Mining Proposal and a Project Management Plan to the WA Department
of Mines Regulations, Industry and Safety (DMIRS) to seek approval to mine Weerianna.
SILICA HILLS:
Exploration at Silica Hills (see Figure 1) has been ongoing over the past year and this work has increased our
confidence in the project. Exploration work exposed a quartz vein system style gold deposit within a silicified
intrusive environment.
The geology of the project is characterised by a poorly exposed quartz vein system within Archean felsic and
mafic rocks, along a shear system. It is becoming more evident as work extends to the east, that the coarse
nugget gold and quartz veins continue. The work over the past year has helped develop a strategy to further
advance Silica Hills and Programme of Works have been approved and the work is continuing.
Figure 4: Examples of gold bars poured from Silica Hills nuggets and quartz/gold specimens.
4 Artemis Resources Limited ASX announcement dated 26 June 2014 – Acquisition of Gold Deposit to Kickstart West Pilbara Gold and
Base Metals Exploration Weerianna
Annual Report for 2018
Page 8
Figure 5: Map of the Silica Hills area showing distribution of nugget recovery areas and location of known quartz
veins and stockwork, and proposed test pits.
WHUNDO COPPER PROJECT
Drilling during the year confirmed the presence of significant widths of high grade copper, cobalt and zinc zones at the
Whundo Copper Mine, which is located only 15 km from the Radio Hill Plant. Assay data from these holes is being
incorporated into a new JORC compliant resource estimate prior to the Radio Hill Plant being recommissioned.
Significant intercepts included5:
o
▪
▪
▪
▪
▪
▪
▪
▪
▪
10m at 0.39% Cobalt from 87m (AWRC025)
(including 1m at 1.75% Cobalt from 88m)
6m at 6.55% Zinc from 42m (AWRC022)
13m at 3.18% Copper and 3.95% Zinc from 48m (AWRC021)
8m at 1.38% Copper from 77m (AWRC025)
17m at 0.99% Copper from 97 metres in (AWRC025)
5m at 4.24% Zinc from 18m (AWRC027)
12m at 4.46% Zinc from 34m (AWRC027)
12m at 7.17% Zinc from 46m (AWRC027)
13m at 1.98% Copper from 50m (AWRC052)
5 Artemis Resources Limited ASX announcement dated 11 April 2018 – High grade cobalt, copper and zinc drilled at Whundo.
Annual Report for 2018
Page 9
Figure 6: Interpreted Cross Section Showing historical Copper & Zinc Intersections and the results of Artemis drilling.
RUTH WELL PROJECT
During the year Artemis conducted its first Reverse Circulation (RC) drilling at Ruth Well Nickel Copper Cobalt
Project with grades up to 11.15% Ni intersected.
An Initial 38 RC holes totalling 2,838m drilling programme was completed with significant results including6:
▪
▪
▪
o
o
o
o
13 metres @ 2.14% Ni, 1.19% Cu, 0.07% Co, 0.6 g/t Au, 0.6g/t Pd from 55m (EWRC003)
Incl 2m @ 8.74% Ni, 3.12% Cu, 0.26% Co, 1.58g/t Pd from 57m
Incl 1m @ 11.15% Ni from 57 metres
21 metres @ 1.11%Ni, 0.88% Cu, 0.05% Co from 30m (EWRC002)
Incl 1m @ 2.54% Ni, 0.66% Cu, 0.07% Co, 3.73g/t Au & 2.82g/t Pd from 30 metres
11 metres @ 0.85% Ni, 0.55% Cu, 0.05% Co from40m (EWRC003)
Incl 1m @ 1.81% Ni, 0.64% Cu, 0.08% Co from 55 metres
Nickel has now been identified over a potential 3.5km of strike on and east-west trend with further drilling to
take place once Programme of Works (POW) are approved by DMIRS. The Ruth Well Project (Figure 1) is
located 12km north of the Radio Hill Operations.
6 Artemis Resources Limited ASX announcement dated 4 May 2018 – 11.5% nickel drilled at Ruth Well – amended.
Annual Report for 2018
Page 10
Figure 7: Ruth Well interpretative Cross Section 486020mE
RADIO HILL NICKEL PROJECT
In April 2018 Artemis completed an 80 hole Reverse Circulation (RC) drilling programme at Radio Hill (totalling
7,052 m), designed to delineate the unmined shallow nickel/copper/cobalt mineralisation at of the Radio Hill
deposit located 400m from the Radio Hill plant crushing circuit.
The best intercepts include7:
▪
Incl. 3m @ 3.37% Ni, 2.05% Cu, 0.14% Co from 27m
Incl. 2m @2.53% Ni, 1.35% Cu, 0.11% Co from 32m
Incl. 5m @2.46% Ni, 2.26% Cu, 0.10% Co from 37m
15m @ 2.05% Ni, 1.94% Cu, 0.09% Co from 27m (ARH066)
o
o
o
7m @ 1.9% Ni, 1.07% Cu, 0.08% Co from 18m (ARH015)
8m @ 1.14% Ni, 0.96% Cu, 0.06% Co from 75m (ARH007)
3m @ 1.35% Ni, 1.27% Cu, 0.07% Co from 88m (ARH046)
3m @ 1.24% Ni, 2.42% Cu, 0.07% Co from 123m (ARH019)
2m @2.93% Ni, 2.90% Cu, 0.12% Co from 19m (ARH020)
25m @ 0.71% Ni, 0.89% Cu, 0.03% Co from 50m (ARH004)
19m @ 0.57% Ni, 0.99% Cu, 0.02% Co from 26 m (ARH062).
▪
▪
▪
▪
▪
▪
▪
Following these excellent Ni/Cu/Co grades the focus is now on calculating the new near surface mineral resource
estimates and producing optimised open pit shells.
7 Artemis Resources Limited ASX announcement dated 30 April 2018 – High grade nickel at Radio Hill.
Annual Report for 2018
Page 11
Figure 8: Location of the RC drilling programme at Radio Hill mine site.
RADIO HILL PROCESSING PLANT
The Radio Hill mine (Ni, Cu, Co) and processing plant and infrastructure was purchased by Artemis in April 2017 with
the aim of providing Artemis with regional processing capability, that can be used to process a range of ores from the
Company’s own projects in the West Pilbara region, including:
•
•
•
•
•
•
Carlow Castle - cobalt, copper and gold
Whundo – copper, cobalt, zinc
Radio Hill - copper, nickel, cobalt;
Munni Munni – PGE, nickel and gold;
Silica Hills, Weerianna- gold; and
Other conglomerate gold deposits within close proximity to the plant.
The Radio Hill complex offers several key advantages for getting into production earlier and more cost effectively than
would otherwise be possible:
•
•
•
•
•
The site is permitted for operations;
There is a permitted tailings storage facility on site;
Existing infrastructure for mains power supply has been well maintained;
Strong water supply from an existing bore field with proved capacity and quality; and
Radio Hill is only 35km from Karratha so there is no need to establish expensive camps and associated
infrastructure for the work force.
During the year Artemis appointed Process 26 Engineers and Constructors (www.process26.com) to refurbish the existing
Radio Hill crushing and grinding circuit, and once approved, to upgrade the facility by the addition of additional crushing
equipment and the installation of a new gravity gold extraction circuit.
In August 2018 the Company received approvals allowing it to install and commission a new tertiary crusher, gold circuit
and our newly refurbished crushing and grinding units.
Under the new amendment to Environmental Licence L7922/1989/5 the Licence holder (Fox Radio Hill Pty Ltd – a wholly
owned subsidiary of Artemis) now has an approved Stage 1 throughput capacity of 500,000 tpa. Stage 1 activities include
the installation and operation of a modular gravity gold processing unit and associated crushing and milling equipment.
The new infrastructure to be installed includes:
Annual Report for 2018
Page 12
▪
▪
▪
▪
A HP200 cone crusher (tertiary crusher);
A gravity gold recovery circuit capable of treating up to 500,000 tpa of gold ore;
A gold room with the capability to refine and produce gold dorè; and
Product sampling and dewatering facilities.
This Stage 1 infrastructure will be operated with the existing multistage crushing and grinding plant which are approved
under Environmental Licence L7922/1989/5.
Under the current approvals the Company can operate a geotube facility as a temporary solution to contain gravity circuit
rejects for potential future retreatment. Geotubes are an interim but high cost option available to the Company that will
be further assessed depending upon the timing of tailings storage facility (TSF) TSF3 approvals.
Concurrently, Artemis will advance submissions needed for Stage 2 base metal operations at Radio Hill including a new,
4Mt tailings storage facility (TSF4).
Figure 9: Gold circuit equipment on site at Radio Hill awaiting installation
Figure 10: Refurbished crushing circuit and fine ore bin
Annual Report for 2018
Page 13
Figure 11: Radio Hill Plant at dusk.
MUNNI MUNNI
Artemis has now met its $750,000 expenditure to earn a 70% interest from Platina Resources in the Munni
Munni Project (See Figure 1). Munni Munni was originally targeted for platinum group elements. Artemis
assessed the potential for mining the PGE resource and identified opportunities to both costean and drill
shallow holes, looking to increase the potential of open pitable resources. The results of this work are being
evaluated and will form the basis for a possible re-estimation of the resource to JORC 2012.
In reviewing all data to date, including a VTEM survey flown by Platina in 2010, Artemis has identified potential
gold opportunities, both structurally hosted and as hydrothermal and/or detrital style. A series of geophysical
surveys have been undertaken looking at sedimentary units that sit above and to the side of the Munni Munni
Mafic Igneous Complex. These sediments were never focused on in the pursuit of platinum group elements
and Reverse Circulation drilling was used as precollars before diamond drilling was completed.
Artemis geologists have reviewed several drill logs and drill holes to better define possible conglomerate or
paleoplacer gold. Only in diamond drill core has the ability to review lithology been possible.
A SAM (Sub Audio Magnetics - a proprietary technique of GAP Geophysics) was successfully used by Artemis
at several of our projects including Carlow Castle where the technique has clearly defined mineralised
structures. A SAM survey has recently been completed over a small part of Munni Munni and final interpreted
results will be reported when they become available. The survey is looking for potential structures within
sediments that surround the Munni Munni Igneous Complex. A ZTEM survey by Geotech Airborne has also
recently been completed. Data is being processed and will then be interpreted. Results will be reported when
they become available.
Annual Report for 2018
Page 14
600 KM2 of STRATEGIC EXPLORATION GROUND NEAR TELFER
During the year Artemis applied for a 600km2 tenement (E45/5276) within the highly prospective Proterozoic
Paterson orogen, located approximately 40km east of the Telfer Au – Cu mine in the Pilbara region of Western
Australia, in the Paterson Ranges. Early stage exploration drilling reported by Greatland Gold plc (a London
listed company) on 25 June and 4 July 2018 from their nearby Haverion Project, included:
▪ HAD001 - 121m at 2.93g/t gold (Au) and 0.23% copper (Cu) from 497m to 618m.
▪ HAD003 - 21m at 3.78g/t gold and 0.44% copper from 418m, including 1m at 29.12g/t gold and 0.4%
copper from 428.5m.
The geological structures that host the Haverion discovery run due north into Artemis’s new Armada Prospect.
Figure 12: Prospective structural and mineralisation prospectivity for the Armada Prospect.
SUPER DEEP DRILLING – WEST PILBARA
ASD-1 (see Figure 1 and Figure 13) was planned for a vertical depth of +3,300m and designed to test the many
rock sequences in the Pilbara Basin from surface and deep into the basement’s geology. These deeper rock
sequences were interpreted or inferred to exist, based on very sparse data. This surface and shallow data does
not explain observed surface mineralisation of diamonds, cobalt, zinc, lead and gold.
What Artemis defined (with the hole being terminated at 1,348.5 metres) is valuable as it shows the basement
(hard rock geology) is undulating and at this location dips to the north from ASD-1. The sediments (now rock)
have filled in the topography that existed, which would have been hills and valleys. This means there are fertile
sites and areas where mafic gold rich conglomerates can form, like between ASD-1 and Munni Munni (Figure
1).
Annual Report for 2018
Page 15
ASD-2 (See Figure 1) was undertaken to further understand the geology and the nature of the contacts
between sedimentary rocks and felsic intrusions or basement geology. ASD-2 was terminated at 790.5 metres.
The programme was undertaken with the support of the Exploration Incentive Scheme (EIS) a programme of
co funding drilling run by the West Australian government through the Department of Mines Industry
Regulation and Safety (DMIRS) and CSIRO who will log and analyse the core. Results will be made available as
these come to hand.
Figure 13: Schematic Interpretative Long-Section. North-South orientation of section with Munni Munni
and Purdy’s Reward to the north (right side of image)
CORPORATE
Board Appointment
During the year the Company appointed Sheikh Maktoum Hasher Maktoum al Maktoum as a Non-Executive Director of
the Company.
A brief outline of H.H. Sheikh Maktoum Hasher al Maktoum’s background is included in the Directors Report.
CEO Appointment
Mr Wayne Bramwell was appointed Chief Executive Officer on 19 June 2018.
Mr Bramwell is an experienced metallurgist and mining executive with over 26 years of international and Australian
project development expertise across the base metals, precious metals and bulk commodity sectors. He has extensive
experience dealing with international financial institutions and brings to the Company his negotiating skills with
international off-take partners and trading houses, having previously negotiated two project level strategic joint ventures
with Japan’s Toyota Tsusho Corporation and Nittetsu Mining Co. Ltd.
Mr Bramwell holds a Bachelor of Science (Mineral Science - Extractive Metallurgy), Graduate Diploma of Business, Master
of Science (Mineral Economics) and is a Graduate of the Australian Institute of Company Directors (GAICD).
Annual Report for 2018
Page 16
Acquisitions:
During the year the Company acquired a 100% interest in Elysian Resources Pty Limited and Hardrock Resources Pty
Limited for 33 million Artemis shares and $1.5 million in cash. The acquisition added approximately 300 km² across 13
tenements in the West Pilbara through a joint venture in which it now has a 70% interest.
In addition, the Company has exercised its option to earn-in up to an 80% interest in two of Macarthur Minerals Limited
(“Macarthur”) (TSX-V: MMS) tenements located 42km west-southwest of Marble Bar in the East Pilbara. Artemis
Resources is specifically interested in the conglomerate gold potential of these two large tenements covering a total of
265km2.
Under the terms of the binding term sheet, Artemis has paid the amount of A$170,000 to Macarthur to exercise its option
to earn up to an 80% interest in Exploration Licence Application E45/4779 and Exploration Licence E45/4732.
Capital Raising:
During the year the Company raised $16.5 million through the issue of 20 million shares at 7.5 cents, 23.7 million shares
at 12.66 cents and 105 million shares at 20 cents. Investors included Sprott Capital Partners Canada, Global Investment
Strategy UK Ltd and a number of other institutional and professional investors from the USA, Netherlands and Australia.
A further $3,075,488 was received on the exercise of options.
As outlined above and in the ASX announcement of 11 December 2017 the company received approximately $6 million
in convertible note funding which will be used to refurbish the Radio Hill Plant.
Sale of Novo Resources Corp. shares
During the quarter Artemis sold its 4 million Novo shares to Canadian mining company, Kirkland Lake Gold Ltd
(ASX: KLA, TSE: KL) (“Kirkland Lake Gold”), for net proceeds of A$20.3 million, being the Australian dollar (AUD)
equivalent of Canadian dollars (CAD) $5.00 per Novo share (using an exchange rate of 1 CAD = 1.04 AUD).
The share sale transaction was arranged on an unsolicited basis. As a condition to completion, Novo released
Artemis from the contractual 12 month hold period for these shares, which was originally due to expire in
August this year. The transaction was closed at the end of May 2018.
Edward Mead
Director
28 September 2018
Annual Report for 2018
Page 17
Annual Mineral Resources Statement
As at 30 June 2018
Gold: Mineral Resources8
Project
Area
Resource
Category
Cut
off Grade
(Au g/t)
Tonnes Au (g/t)
Ag
(g/t)
Cu (%) Co (%)
Contained
Au (oz)
Contained
Ag (oz)
Contained
Cu (t)
Contained
Co (t)
Mt Clementi Ashburton
Inferred
0.5
1,132,000 1.80
17.00
65,511
618,710
Weeriannaii
Carlow Castle
Sthiii
Quod Estiii
Total
West
Pilbara
West
Pilbara
West
Pilbara
Inferred
1
1,005,000 2.20
71,085
Inferred
0.05% Co 2,200,000 1.3
1.6
0.5
0.09
89,600
113,042
11,220
1,990
Indicated 0.05% Co
200,000
1.8
1.6
0.70 0.35
11,500
10,031
1,400
700
4,537,000
1.6
5.1
0.3
0.1
237,696
741,784
12,620
2,690
Antimony (M08/191-193): Mineral Resources9
Project
Area
Resource
Category
Eastern Hillsiv
Ashburton
Indicated
Inferred
Cutoff
Grade
(Sb %)
1.0
1.0
Tonnes (t)
Sb
(%)
810,000
2
500,000
1.3
Pb
(%)
3.1
1.5
Ag
Au
Contained
Contained
(g/t)
(g/t)
Sb (t)
Pb (t)
26
16
0.41
0.2
15,900
25,200
6,500
7,500
Total
1,310,000
1.7
2.5
24
0.34
22,400
32,700
NICKEL-COPPER (M47/161): Mineral Resources10
Project
Mineralisation
Resource
Category
Tonnes
Ni %
Cu %
Contained Ni
(t)
Contained Cu (t)
Radio Hillv
Primary Sulphide
Indicated
1,980,000
0.61
1.04
12,078
Primary Sulphide
Inferred
2,040,000
0.42
0.73
8,568
Total
4,020,000
0.51
0.88
20,646
20,592
14,892
35,484
COPPER-ZINC (M47/7): Mineral Resources11
Project
West
Whundovi
Mineralisation
Primary Sulphide
Resource
Category
Measured
Primary Sulphide
Indicated
Oxide12
Whundovii
Primary Sulphide
Measured &
Inferred
Measured
Primary Sulphide
Indicated
Primary Sulphide
Inferred
Tonnes
Cu %
Zn %
386,000
259,000
1.2
1.1
1.9
1.7
73,600
1.78
0.21
304,000
598,000
140,000
1.3
1.0
0.8
0.1
0.6
0.2
4,632
2,849
1,310
3,952
5,980
1,120
Contained Cu
(t)
Contained Zn (t)
7,334
4,403
155
304
3,588
280
15,909
Total
1,760,600
1.13
0.90
19,843
i As per Artemis Resources Limited ASX Annual Report to Shareholders 2016
ii As per Artemis Resources Limited ASX Annual Report to Shareholders 2016
iii As per Artemis Resources Limited ASX Release to Shareholders January 22nd & 31st 2018
iv As per Fox Resources Limited ASX Annual Report to Shareholders 2014
v As per Fox Resources Limited ASX Annual Report to Shareholders 2006
Annual Report for 2018
Page 18
ZINC (M47/7): Mineral Resources13
Project
Mineralisation
Resource
Category
Tonnes
Zn %
Cu %
Contained Zn
(t)
Contained Cu (t)
Whundoviii
Primary Sulphide
Measured
Primary Sulphide
Indicated
Primary Sulphide
Inferred
Ayshiaix
Primary Sulphide
Measured
94,000
249,000
78,000
150,000
0.6
1.2
1.1
2.4
Primary Sulphide
Indicated
344,000
3.3
Primary Sulphide
Inferred
273,000
1.3
-
-
-
0.5
0.5
0.3
564
2988
858
3600
11352
3549
Total
1,188,000
1.93
22,911
Including
767,000
0.43
-
-
-
750
1720
819
3,289
MT OSCAR MAGNETITE (E47/1217): Mineral Resource14
Domain
Resource
Category
Tonnage
(Mt)
Head
Fe (%)
Mag Anomaly 1X
Indicated
Inferred
Mag Anomaly 2x
Indicated
Inferred
Total
Note: Totals may not add up due to rounding
43
32
40
11
126
33.6
33.3
33.9
36.1
33.8
Mass
Recovery
(%)
32.8
10.4
20.0
33.7
23.1
Conc
Fe (%)
Conc
SiO2 (%)
Conc
Al2O3
Conc
P (%)
Conc
LOI (%)
58.6
60.3
62.9
60.3
60.5
14.2
12.7
9.9
13.3
12.4
0.80
0.73
0.40
0.56
0.036
0.036
0.022
0.037
0.63
0.032
-0.34
-0.95
-1.16
-1.31
-0.84
In accordance with Listing Rule 5.23.2, Artemis confirms that it is not aware of any new information or data that materially affects the information
included in the Annual Mineral Resources Statement above, and that in the case of mineral resources that all material assumptions and technical
parameters underpinning the estimates in the Annual Mineral Resources Statement continue to apply and have not materially changed.
Material Changes and Resource Statement Comparison
The Company during this year has continued to review and report its mineral resources at least annually and provide an
Annual Mineral Resources Statement. The date of reporting is 30 June each year, to coincide with the Company’s end of
financial year balance date. If there are any material changes to its mineral resources over the course of the year, the
Company is required to promptly report these changes. In completing the annual review for the year ended 30 June 2018,
the historical resource factors for Projects were reviewed and found to be relevant and current.
Governance Arrangements and Internal Controls
Artemis has ensured that the mineral resources quoted are subject to good governance arrangements and internal
controls. The mineral resources reported have been generated by independent external consultants who are experienced
in best practices in modelling and estimation methods. The consultants have also undertaken reviews of the quality and
suitability of the underlying information used to generate the resource estimation. In addition, Artemis’ management
carries out regular reviews of internal processes and external contractors that have been engaged by the Company.
The Carlow Castle, Mt Oscar, Eastern Hills and Weerianna mineral resources were compiled in accordance with the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code) 2012 Edition.
The Mt Clement-Paulsens, Whundo, West Whundo, Ayshia and Radio Hill mineral resources were compiled in accordance
with the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’ (JORC Code) 2004
Edition.
vi As per Fox Resources Limited ASX Annual Report to Shareholders 2014
vii As per Fox Resources Limited ASX Annual Report to Shareholders 2014
Annual Report for 2018
Page 19
Competent Person Statements
The information in this statement that relates to Exploration Results and Exploration Targets is based on information
compiled or reviewed by Allan Younger, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr
Younger is a consultant to the Company. Mr Younger has sufficient experience that is relevant to the style of
mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a
Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves’.
Mr Younger consents to the inclusion in this statement of the matters based on his information in the form and context
in which it appears.
i 2011 estimate (Apex Geoscience Ltd). Estimated according to JORC Code (2004).
ii 2013 estimate (Geostat Services Pty Ltd) Cut-off grade 0.5 g/t Au. Estimated according to JORC Code (2012).
iii 2018 estimate (Mr Philip A Jones) Cut-off grade 0.5 % Co. Estimated according to JORC Code (2012).
iv 2013 estimate (CoxsRocks Pty Ltd) Cut-off grade 1.0% Sb. Estimated according to JORC Code (2012).
v 2009 estimate (Snowden) Cut-off grade 0.5% Ni in Ni dominant material, and 0.5% Cu in the Cu dominant hanging wall.
Estimated according to JORC Code (2004).
vi 2006 estimate (RSG Global) Cut-off grade 0.5% Cu or 0.5% Zn. The Measured resource has been depleted from the
RSG estimate by 20,000t based on company mining records. Estimated according to JORC Code (2004).
vii 2007 estimate (Coffey Mining) Cut-off grade 0.4% Cu or 0.4% Zn. Estimated according to JORC Code (2004).
viii 2006 estimate (RSG Global) Cut-off grade 0.4% Zn. Estimated according to JORC Code (2004).
ix 2009 estimate (Golder Associates) Inferred Mineral Resource at Fe cut-off grade of 20%. Estimated according to JORC
Code (2004).
x 2014 estimate (ROM Resources) estimated according to JORC Code (2012).
Annual Report for 2018
Page 20
TENEMENT SCHEDULE – All tenements are in Western Australia
E47/3942 (a)
P47/1112
P47/1126
P47/1127
P47/1134
M47/1527
P47/1519 / M47/1568(a)
P47/1619
P47/1621
P47/1622
P47/1819
P47/18327
P47/1833 (a)7
P47/1881 (a)7
P47/1897 (a)
L47/781 (a)
L47/782 (a)
L47/820 (a)
M47/177²
M47/223³
M47/288²
East Pilbara
E45/47795
E45/47325
E45/5276
Munni Munni6
M47/123
M47/124
M47/125
M47/126
Mt Clement
M08/191¹
M08/192¹
M08/193¹
Fox Radio Hill Pty Ltd
L47/93
L47/163
M47/7
M47/9
M47/161
M47/337
Shear Zone Mining Pty Ltd
M47/934
M47/2324
Mt OscarWits
E47/1217
E47/1745
E47/1746
E47/1797
E47/2716
E47/3160
E47/3322
E47/33407
E47/33417
E47/33617
E47/3373 (a)
E47/33907
E47/34437
E47/34877
E47/35347
E47/3535 (a)7
E47/3545 (a)
E47/3546
E47/3547
E47/35647
E47/3612
E47/3707
E47/3708
E47/3709
E47/3719 (a)
E47/3720
E47/3721
E47/3722
E47/3723
All tenements are 100% owned unless otherwise indicated
(a) Tenement applications.
¹ 80% Artemis - Gold joint venture with Northern Star Resources (20%).
² 70% Artemis.
3 80% Artemis.
4 34% Artemis.
5 Option to acquire up to 80% by Artemis, remainder is held by Macarthur Minerals Limited.
6 0% Artemis. Heads of Agreement to earn 70% and form joint venture with Platina Resources.
7 70% Artemis – Karratha Gold Joint Venture
Annual Report for 2018
Page 21
CORPORATE GOVERNANCE STATEMENT
Artemis, through its Board and executives, recognises the need to establish and maintain corporate governance policies
and practices that reflect the requirements of the market regulators and participants, and the expectations of members
and others who deal with Artemis. These policies and practices remain under constant review as the corporate
governance environment and good practices evolve.
ASX Corporate Governance Principles and Recommendations
The third edition of ASX Corporate Governance Council Principles and Recommendations (the “Principles”) sets out
recommended corporate governance practices for entities listed on the ASX.
The Company has issued a Corporate Governance Statement which discloses the Company’s corporate governance
practices and the extent to which the Company has followed the recommendations set out in the Principles. The
Corporate Governance Statement was approved by the Board on 27 September 2018 and is available on the
Company’s website: https://artemisresources.com.au/company/corporate-governance
Page 22
DIRECTORS’ REPORT
DIRECTORS’ REPORT
Your Directors present their report on Artemis Resources Limited (Artemis or the Company) for the financial year ended
30 June 2018.
DIRECTORS
The names of Directors in office at any time during or since the end of the period are:
Current Directors
MR DAVID LENIGAS
Executive Chairman
Mr Lenigas is an experienced mining engineer with significant global resources and
corporate experience, having served as executive chairman, chairman, and non-
executive director of many public listed companies in London, Canada, Johannesburg,
and Australia.
Mr Lenigas has a Bachelor of Applied Science (Mining Engineering) (Distinction) from
Curtin University’s Kalgoorlie School of Mines and holds a Western Australian First Class
Mine Manager’s Certificate of Competency.
Mr Lenigas was appointed a Director on 3 November 2016. Mr Lenigas is the Non-
Executive Chairman of Clancy Exploration Limited and the Non-Executive Chairman of
Southern Hemisphere Mining Limited.
H.H. SHEIKH MAKTOUM
HASHER AL MAKTOUM
Non-Executive Director
H.H. Sheikh Maktoum Hasher al Maktoum is a member of Dubai’s ruling family. He is the
President of Al Fajer Group and Chairman of Dubai International Holdings, Chairman of
Manannan Hydro Limited and is a Non-Executive board member of the Commercial Bank
of Dubai.
MR EDWARD MEAD
Executive Director
H.H. Sheikh Maktoum Hasher al Maktoum has a BSc. Business Administration and
Finance from Suffolk University in Boston, USA and was awarded CEO of the Year by CEO
Middle East in 2009 and was awarded Young Global Leader by the World Economic
Forum in 2007.
H.H. Sheikh Maktoum Hasher al Maktoum was appointed a Director on 26 October 2017.
Mr Mead is a geologist with 20 years’ experience in gold and base metals exploration,
mine development and mine production. Mr Mead has also worked in the oil and gas
industry on offshore drilling platforms. Other commodities that he has significant
experience with are iron ore, magnetite, coal, manganese, lithium, potash and uranium.
He has a Bachelor of Science (Geology) from Canterbury University in New Zealand and
is a member of the Australian Institute of Mining and Metallurgy. He has worked for the
Geological Survey of Western Australia, Portman Mining Limited, Western Mining
Corporation (BHPB), Sons of Gwalia, Fox Resources Ltd, Comdek Ltd and Baker Hughes
Inteq and a number of other companies through his own consultancy.
Mr Mead was appointed a Director on 31 December 2014.
MR ALEX DUNCAN-KEMP
Executive Director
Mr Duncan-Kemp is an experienced mining engineer with over 20 years’ experience in
gold, iron ore and base metal mine development and mining operations. Mr Duncan-
Kemp has also worked on public infrastructure projects in construction of roads and
construction earthworks.
Mr Duncan-Kemp has worked in the Pilbara and Kimberley on iron ore, both haematitic
and magnetite ores, the Yilgarn Eastern and North-eastern Goldfields on gold, the
Eastern Goldfields on nickel, Northwest Queensland on phosphate and the Murchison on
Page 23
DIRECTORS’ REPORT
gold and copper operations. He has also worked at a large civil and mining contractor in
both operations and project tendering areas.
Mr Duncan-Kemp has a Bachelor of Applied Science (Mining Engineering) from Curtin
University’s Kalgoorlie School of Mines and is the holder of a Western Australian First
Class Mine Managers’ Certificate of Competency and is a Member of the Australian
Institute of Mining and Metallurgy.
Mr Duncan-Kemp was appointed a Director on 3 January 2017.
Directors have been in office since the start of the financial period to the date of this report, unless otherwise stated.
Secretary
MR GUY ROBERTSON
B Com (Hons.) CA
Guy Robertson was appointed Company Secretary on 12 November 2009.
Mr Robertson has over 25 years’ experience as a Director, CFO and Company Secretary
of both public (ASX- listed) and private companies in both Australia and Hong Kong. He
has had significant experience in due diligence, acquisitions, IPOs and corporate
management. Mr Robertson has a Bachelor of Commerce (Hons) and is a Chartered
Accountant. He is a director of Hastings Technology Metals Ltd and Metal Bank Limited
and was previously a director of Bellevue Gold Limited.
SIGNIFICANT CHANGES IN STATE OF AFFAIRS
There were no significant changes in the state of affairs of the Company during the year.
PRINCIPAL ACTIVITIES
The principal activity of the Company during the financial year was mineral exploration, the re-commissioning of the
Fox Radio Hill Plant and direct and indirect investments in the mining industry. There have been no significant changes
in the nature of the Company’s principal activities during the financial year.
SIGNIFICANT AFTER BALANCE DATE EVENTS
Other than as outlined above there are currently no matters or circumstances that have arisen since the end of the
financial period that have significantly affected or may significantly affect the operations of the consolidated entity, the
results of those operations, or the state of affairs of the consolidated entity in future financial years.
LIKELY FUTURE DEVELOPMENTS AND EXPECTED RESULTS
The primary objective of Artemis is to explore its current tenements in Australia and the Company continues to look to
invest in mineral resources projects which have the potential to become mines.
PERFORMANCE IN RELATION TO ENVIRONMENTAL REGULATION
The consolidated entity will comply with its obligations in relation to environmental regulation on its projects when it
undertakes exploration. The Directors are not aware of any breaches of any environmental regulations during the period
covered by this Report.
OPERATING RESULTS AND FINANCIAL REVIEW
The profit/(loss) of the consolidated entity after providing for income tax amounted to $12,073,913 (2017: loss of
$2,178,504). The result is substantially attributable to the receipt and subsequent sale of 4 million Novo shares at CAD 5
each or A$20,318,979, before costs.
The Group’s operating income increased to $19,145,095 (2017: $633,492) with $18,546,823 attributable to the sale of
Novo shares above, net of an amount of $1,559,575 applied as a recovery of exploration costs, and sales of gold and copper
ore.
Page 24
DIRECTORS’ REPORT
The Group’s expenses increased to $7,071,182 (2017: $2,811,996). The increase was attributable to share based payments
to directors of $2,148,171 of which $1,525,000 was a sign on fee for H.H Sheikh Maktoum Hasher Al Maktoum, with other
overhead expenses increasing commensurately with the level of activity.
The carrying value of exploration and development costs increased to $40,474,892 (2017: $8,992,705) reflecting a
significant increase in exploration on the Company’s gold and cobalt prospects and also the acquisition of Elysian Resources
Pty Limited and Hard Rock Resources Pty Limited for a consideration of $10,220,000 (in cash and shares).
Net assets increased to $58,610,558 (2017: $5,924,113) reflecting the increase in share capital during the year from
placements $25,500,000 (before costs), from exercise of options $3,075,489, and from issue of shares on acquisitions
$8,720,000, and the result for the year, including the Novo shares fee and profit on subsequent sale, being $16,606,896
and $3,499,502 respectively.
DIVIDENDS PAID OR RECOMMENDED
The Directors do not recommend the payment of a dividend and no dividend has been paid or declared to the date of
this Report.
MEETINGS OF DIRECTORS
The number of Directors' meetings (including committees) held during the financial period, the eligibility of each
Director to attend and the number of meetings attended by each director are:
Director
David Lenigas
Edward Mead
Alex Duncan-Kemp
H.H. Sheikh Maktoum
Directors’ Meetings
Meetings
Attended
Number
Eligible to
Attend
Audit Committee Meetings
Number
Eligible to
Attend
Meetings
Attended
4
4
4
1
4
4
4
3
2
2
-
-
2
2
-
-
In addition to the Directors’ meetings outlined above there were 6 circular resolutions.
REMUNERATION REPORT (AUDITED)
Remuneration Policy
The Board’s policy for determining the nature and amount of remuneration for Board members and officers is as
follows:
•
The remuneration policy, which sets the terms and conditions (where appropriate) for the executive
directors and other senior staff members, was developed by the Chairman and Company Secretary and
approved by the Board;
•
In determining competitive remuneration rates, the Board may seek independent advice on local and
international trends among comparative companies and industries generally. The Board examines terms
and conditions for employee incentive schemes, benefit plans and share plans. Independent advice may be
obtained to confirm that executive remuneration is in line with market practice and is reasonable in the
context of Australian executive reward practices. No remuneration consultants were retained by the Group
during the year;
Page 25
DIRECTORS’ REPORT
•
•
•
The Company is a mineral exploration company, and therefore speculative in terms of performance.
Consistent with attracting and retaining talented executives, directors and senior executives, such personnel
are paid market rates associated with individuals in similar positions within the same industry. Options and
performance incentives may be issued particularly as the Company moves from commercialisation to a
producing entity and key performance indicators such as profit and production can be used as
measurements for assessing executive performance;
Given the early stage of the Company’s Projects it is not meaningful to track executive compensation to
financial results and shareholder wealth. It is also not possible to set meaningful specific objective
performance criteria for directors as this stage;
All remuneration paid to directors and officers is valued at the cost to the Company and expensed. Where
appropriate, shares given to directors, executives and officers are valued as the difference between the
market price of those shares and the amount paid by the director or executive. Options are valued using the
Black-Scholes methodology; and
The Board policy is to remunerate non-executive directors and officers at market rates for comparable
companies for time, commitment and responsibilities. The Chairman, in consultation with independent
advisors, determines payments to the non-executive directors and reviews their remuneration annually,
based on market practice, duties and accountability. The maximum aggregate amount of fees that can be
paid to non-executive directors is subject to approval by shareholders in a General Meeting, and is currently
$150,000 per annum, as approved by shareholders. Fees for non-executive directors and officers are not
linked to the performance of the Company. However, to align directors’ interests with shareholder interests,
the directors and officers are encouraged to hold shares in the Company.
Directors' and Executive Officers’ Remuneration
(a) Details of Directors and Key Management Personnel
(i) Current Directors
David Lenigas – Executive Chairman (appointed 3 November 2016)
Edward Mead – Executive Director (appointed 31 December 2014)
Alex Duncan-Kemp – Executive Director (appointed 3 January 2017)
H.H. Sheikh Maktoum Hasher Al Maktoum (appointed 26 October 2017)
(ii) Former Directors
George Frangeskides - Chairman (appointed 17 January 2011, resigned 28 September 2011, reappointed 15 August
2012, resigned 3 April 2017)
Campbell Baird – Non-Executive Director (appointed 17 August 2015, resigned 23 June 2017)
Page 26
DIRECTORS’ REPORT
(iii) Company Secretary
Guy Robertson
(iv) Key Management Personnel
Wayne Bramwell – Chief Executive Officer (appointed 19 June 2018)
Edward Mead – General Manager Exploration
Alex Duncan-Kemp – General Manager Operations
Directors’ remuneration and other terms of employment are reviewed annually by the Board having regard to
performance against goals set at the start of the year, relative comparative information and independent expert advice.
Except as detailed in Notes (a) – (d) to the Remuneration Report, no Director has received or become entitled to receive,
during or since the financial period, a benefit because of a contract made by the Company or a related body corporate
with a Director, a firm of which a Director is a member or an entity in which a Director has a substantial financial interest.
This statement excludes a benefit included in the aggregate amount of emoluments received or due and receivable by
Directors and shown in Notes (a) – (d) to the Remuneration Report, prepared in accordance with the Corporations
Regulations 2001, or the fixed salary of a full time employee of the Company.
(b) Remuneration of Directors and Key Management Personnel
The Board of Directors are responsible for determining and reviewing compensation arrangements. The Board will
assess the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference
to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from
the retention of a high quality Board and executive team.
Remuneration of the Key Management Personnel of the Company and consolidated entity is set out below.
2018
Base
Salary
and Fees
Share
Based
Payments
Post
Employment
Super
Contributions
Total
Base
Salary
and Fees
Share based
Payments
452,717
70,000 1,100,000
-
-
-
-
1,605,000
-
295,149
125,550
325,176
112,318
D. Lenigas
210,000
242,717
Sheikh Maktoum
80,000 1,525,000
220,700
250,727
7,308
74,449
74,449
6,393
A. Duncan-Kemp
E.Mead
W. Bramwell¹
C. Baird
G. Frangeskides
694
14,395
-
-
-
-
-
-
-
-
-
12,000
47,414
¹Commenced 19 June 2018
768,735 1,923,008
694
2,692,437
367,282 1,100,000
(c) Remuneration link to performance – options and performance rights
2017
Post
Employment
Super
Contributions
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Total
1,170,000
125,550
112,318
-
12,000
47,414
1,467,282
Unissued ordinary shares of Artemis Resources Limited under option at the date of this report are as follows:
Date option granted
Expiry date
Issue price of Shares
Number under option
30 November 2017
31 January 2018
6 February 2018
19 June 2018
19 June 2018
30 June 2020
31 January 2021
6 February 2019
19 June 2021
19 June 2021
44 cents
45.38 cents
25 cents
27.39 cents
40 cents
6,000,000
5,439,858
11,250,000
10,000,000
5,000,000
Page 27
DIRECTORS’ REPORT
Included in the options above were options granted as remuneration to Key Management Personnel during the period
as follows:
Name
Date of grant
Expiry date
Opening
balance
start of year
at
Granted as
remuneration
Closing
balance at end
of year
Grant date
value
Duncan-
D. Lenigas
E. Mead
A.
Kemp
W. Bramwell
W. Bramwell
30 November 2017
30 November 2017
30 November 2017
30 June 2020
30 June 2020
30 June 2020
19 June 2018
19 June 2018
19 June 2021
19 June 2021
-
-
-
-
-
3,000,000
1,500,000
1,500,000
3,000,000
1,500,000
1,500,000
$381,526
$190,763
$190,763
10,000,000
5,000,000
10,000,000
5,000,000
$453,681
$189,152
All options are fully vested and exercisable, with the grant value being expensed over the period to the date of expiry.
No options were issued during or outstanding at the end of the previous financial year in respect of Key Management
Personnel.
The following performance rights were issued during the year to Key Management Personnel:
Name
D. Lenigas
E. Mead
A.
Kemp
Duncan-
Date granted
13 September 2017
13 September 2017
13 September 2017
Number
issued
9,000,000
2,000,000
2,000,000
Value per
Share
8.6 cents
8.6 cents
8.6 cents
Performance
period ended
30 June 2019
30 June 2019
30 June 2019
Closing
balance at
end of year
9,000,000
2,000,000
2,000,000
Grant date
value
$619,200
$137,600
$137,600
Shareholders at a General Meeting on 8 September 2017 approved the grant of 15,000,000 performance rights to
Directors and employees. The performance rights were valued by 22 Corporate Advisory Pty Limited, at 8.6 cents a
share being the share price on grant date discounted for lack of marketability. Vesting occurs at the end of the
performance period ended 30 June 2019, if the following performance conditions are met:
Market-based performance conditions:
•
•
•
33.3% of the performance rights will vest when share price exceeds 15 cents; and
33.3% of the performance rights will vest when share price exceeds 20 cents; and
33.3% of the performance rights will vest when share price exceeds 25 cents.
Non-market based performance conditions:
The vesting of the performance rights is also subject to non-market conditions including capital raising, occupational
health and safety outcomes and corporate governance hurdles.
An expense of $469,091 was recognised for the year ended 30 June 2018 in relation to these performance rights.
No performance rights were issued or were outstanding at the end of the previous financial year relating to Key
Management Personnel.
(d) Share and option holdings
All equity dealings with Directors have been entered into with terms and conditions no more favourable than those
that the entity would have adopted if dealing at arm’s length.
Page 28
DIRECTORS’ REPORT
Executive directors
$60,000 directors fees plus
consulting fees at $1,000
per day
Ongoing
(e) Contractual arrangements with executive Key Management Personnel
Component
Fixed remuneration
Chairman
$300,000
CEO
$380,000
Contract duration
Notice by the
individual/company
Termination of
employment (without
cause)
Termination of
employment (with cause)
or by individual
Ongoing
Ongoing
3 months in first year
6 months after first year
3 months
One to 3 months
On termination of employment without cause unexercised options are at the
discretion of the Board.
Vesting of performance rights is at the discretion of the board, who may also shorten
the performance period.
On termination for cause unexercised options will lapse. On termination by employee
unexercised options are at the discretion of the Board.
On termination for cause performance rights not vested will lapse.
(f) Non-executive director arrangements
The non-executive director has a letter of appointment providing for non-executive director fees of $120,000 per
annum. The non-executive director was awarded a sign on fee of 5,000,000 shares on appointment.
Shares held by Directors and Key Management Personnel
Received as
Remuneration
Net change
Other
Balance at end
of year
Period from 1 July 2017 to 30 June 2018
Balance at
beginning
of year
25,000,000
-
-
2,000,000
-
D. Lenigas
H.H Sheikh Maktoum
A. Duncan-Kemp
E. Mead
W. Bramwell
-
5,000,000
-
-
-
27,000,000
5,000,000
Period from 1 July 2016 to 30 June 2017
Balance at
beginning
of year
Received as
Remuneration
Net change
Other²
D. Lenigas
A. Duncan-Kemp
E. Mead¹
C. Baird¹
-
-
-
-
25,000,000
-
2,000,000
875,000
(875,000)
G. Frangeskides¹
50,000
1,500,000
(1,550,000)
-
-
-
-
-
-
-
-
-
25,000,000
5,000,000
-
2,000,000
-
32,000,000
Balance at end
of year
25,000,000
-
2,000,000
-
-
27,000,000
¹Shares received as remuneration relate to an amount charged in and owing at the end of the previous year.
²Amount removed on resignation of director
(2,425,000)
29,375,000
50,000
Page 29
DIRECTORS’ REPORT
OPTIONS
There has been no issue of ordinary shares as a result of the exercise of options by directors and senior management
during or since the end of the financial year. Directors’ holdings of shares and share options have been disclosed in the
Remuneration Report.
INDEMNIFYING OFFICERS
In accordance with the Constitution, except as may be prohibited by the Corporations Act 2001, every officer or agent
of the Company shall be indemnified out of the property of the Company against any liability incurred by him or her in
his or her capacity as officer or agent of the Company or any related corporation in respect of any act or omission
whatsoever and howsoever occurring or in defending any proceedings, whether civil or criminal.
During the financial year the Company paid insurance premiums of $11,522 in respect of a contract insuring the directors
and officers of the consolidated entity against any liability incurred in the course of their duties to the extent permitted
by the Corporations Act 2001. The insurance premiums relate to:
•
Costs and expenses incurred by the relevant officers in defending legal proceedings, whether civil or criminal
and whatever their outcome; and
• Other liabilities that may arise from their position, with the exception of conduct involving wilful breach of duty
or improper use of information to gain a personal advantage.
PROCEEDINGS ON BEHALF OF COMPANY
No person has applied for leave of court to bring proceedings on behalf of the Company or intervene in any proceeding
to which the Company is a party for the purpose of taking responsibility on behalf of the Company for all or any part of
those proceedings.
The Company was not a party to any such proceedings during the year.
AUDITOR’S INDEPENDENCE DECLARATION
The lead auditor’s independence declaration for the year ended 30 June 2018 has been received and can be found on
page 31 of the financial report.
NON-AUDIT SERVICES
The Board, in accordance with advice from the audit committee, is satisfied that the provision of non-audit services
during the year is compatible with the general standard of independence for auditors imposed by the Corporations Act
2001. The Directors are satisfied that the services disclosed below did not compromise the external auditor’s
independence for the following reasons:
-
-
all non-audit services are reviewed and approved by the audit committee prior to commencement to ensure
they do not adversely affect the integrity and objectivity of the auditor, and
the nature of the services provided does not compromise the general principles relating to auditor
independence in accordance with ARES 110: Code of Ethic for Professional Accountants set by the Accounting
Professional and Ethical Standards Board.
The following fees were paid to Hall Chadwick for non-audit services:
Taxation services
2018
$11,192
2017
$2,000
This Report is made in accordance with a resolution of the Directors.
Edward Mead
Director
28 September 2018
Page 30
ARTEMIS RESOURCES LIMITED
ABN 80 107 051 749
AUDITOR’S INDEPENDENCE DECLARATION
UNDER SECTION 307C OF THE CORPORATIONS ACT 2001
TO THE DIRECTORS OF ARTEMIS RESOURCES LIMITED
I declare that, to the best of my knowledge and belief, during the year ended 30 June
2018 there have been no contraventions of:
(i)
the auditor independence requirements as set out in the Corporations Act 2001
in relation to the audit; and
(ii)
any applicable code of professional conduct in relation to the audit.
Hall Chadwick
Level 40, 2 Park Street
Sydney NSW 2000
Drew Townsend
Partner
Date: 28 September 2018
SYDNEY · PENRITH · MELBOURNE · BRISBANE · PERTH · DARWIN
Liability limited by a scheme approved under Professional Standards Legislation
www.hallchadwick.com.au
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
FOR THE YEAR ENDED JUNE 2018
Continuing Operations
Revenue
Other income
Cost of sales
Administration expenses
Personnel costs
Professional fees and consultancy costs
Occupancy costs
Compliance and regulatory expenses
Payments to directors
Exploration expenditure written off
Travel
Share based payments
Marketing costs
Project write off
Provision for stamp duty on acquisition
Provision for diminution in value investments
Legal Fees
Borrowing costs
Consolidated
30 June 2018
$
18,984,232
160,863
Note
2(a)
2(b)
(174,484)
(314,150)
(189,658)
(193,785)
(165,143)
(298,857)
(658,587)
(202,445)
(574,615)
(2,339,999)
(92,436)
-
(520,000)
(316,087)
(388,056)
(642,880)
Consolidated
30 June 2017
$
628,857
4,635
(161,858)
(244,011)
-
(183,964)
(20,882)
(124,688)
(163,699)
-
(145,970)
(1,272,000)
(111,856)
(100,000)
-
-
(46,755)
(236,313)
PROFIT/(LOSS) BEFORE INCOME TAX FOR
THE YEAR
Income tax expense
PROFIT/(LOSS) AFTER INCOME TAX FOR THE
YEAR
3
12,073,913
-
(2,178,504)
-
12,073,913
(2,178,504)
PROFIT/(LOSS) FOR THE YEAR
ATTRIBUTABLE TO:
Members of the parent entity
TOTAL PROFIT/(LOSS) FOR THE YEAR
OTHER COMPREHENSIVE INCOME/(LOSS)
Items that will not be reclassified to profit or loss:
Net change in fair value of available for sale investments
Income tax relating to components of other
comprehensive income
TOTAL COMPREHENSIVE PROFIT/(LOSS) FOR
THE YEAR
TOTAL COMPREHENSIVE PROFIT/(LOSS) FOR
THE YEAR ATTRIBUTABLE TO
Owners of the parent
-
12,073,913
12,073,913
(2,178,504)
(2,178,504)
-
-
-
-
12,073,913
(2,178,504)
12,073,913
12,073,913
(2,178,504)
(2,178,504)
Earnings per share – continuing operations
Basic profit/(loss) per share (cents)
Diluted profit/(loss) per share (cents)
21
21
2.22
2.02
(0.95)
(0.95)
The consolidated statement of profit or loss and other comprehensive income is to be read in conjunction with the
attached notes
Page 32
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
FOR THE YEAR ENDED 30 JUNE 2018
Note
4
5
6
7
8
9
10
11
12
13
Consolidated
30 June 2018
$
Consolidated
30 June 2017
$
27,048,303
1,846,132
430,730
29,325,165
180,250
40,474,892
40,655,142
329,196
616,612
103,904
1,049,712
8,000
8,992,705
9,000,705
69,980,307
10,050,417
7,446,797
8,928
3,914,024
11,369,749
1,860,339
-
2,325,965
4,126,304
11,369,749
4,126,304
58,610,558
5,924,113
79,127,087
724,999
(21,241,528)
58,610,558
58,610,558
39,067,554
172,000
(33,315,441)
5,924,113
5,924,113
CURRENT ASSETS
Cash and cash equivalents
Trade and other receivables
Other financial assets
Total current assets
NON-CURRENT ASSETS
Plant and equipment
Exploration, evaluation and development expenditure
Total non-current assets
TOTAL ASSETS
CURRENT LIABILITIES
Trade and other payables
Employee benefits obligations
Borrowings
Total current liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share Capital
Reserves
Accumulated losses
Parent interests
TOTAL EQUITY
The consolidated statement of financial position is to be read in conjunction with the attached notes.
Page 33
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 30 JUNE 2018
Attributable to equity holders of parent
Share Capital
Reserves
$
39,067,554
-
-
41,053,281
(1,255,748)
172,000
-
90,000
79,127,087
$
172,000
-
-
-
-
(172,000)
814,999
(90,000)
724,999
Accumulated
Losses
$
(33,315,441)
12,073,913
12,073,913
-
-
-
-
-
(21,241,528)
Total Equity
$
5,924,113
12,073,913
12,073,913
41,053,281
(1,255,748)
-
814,999
-
58,610,558
Attributable to equity holders of parent
CONSOLIDATED - 2018
Balance 1 July 2017
Profit for the year
Total comprehensive income for the
year
Issue of shares
Cost of share issue
Exercise of options
Transfer to share based payments
Transfer from share based payments
Balance as at 30 June 2018
CONSOLIDATED - 2017
$
$
Share Capital
Reserves
Balance 1 July 2016
Loss for the year
Total comprehensive income for the
year
Issue of shares
Cost of share issue
Share based payments
Balance as at 30 June 2017
32,374,443
-
-
6,757,934
(64,823)
-
39,067,554
Accumulated
Losses
$
Total Equity
$
-
-
(31,136,937)
(2,178,504)
1,237,506
(1,406,504)
-
-
-
172,000
172,000
(2,178,504)
-
-
-
(33,315,441)
(1,406,504)
6,757,934
(64,823)
172,000
5,924,113
The consolidated statement of changes in equity is to be read in conjunction with the attached notes.
Page 34
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 30 JUNE 2018
Consolidated
30 June 2018
Note
$
Consolidated
30 June 2017
$
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from operations
Payments to suppliers and employees
Interest received
Borrowing costs paid
NET CASH USED IN OPERATING ACTIVITIES
24
CASH FLOWS FROM INVESTING ACTIVITIES
Payments for exploration, evaluation and development
Payments for project acquisition
Payments for plant and equipment
Proceeds from sale of investments
NET CASH USED IN INVESTING ACTIVITIES
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of shares
Cost of issue of shares
Loan (repayment)/proceeds
Proceeds from convertible note
Repayment of convertible note
NET CASH PROVIDED BY FINANCING ACTIVITIES
Increase in cash held
Cash at the beginning of the year
Effect of exchange rate on cash and cash equivalent
CASH AT THE END OF THE YEAR
4
415,535
(3,171,454)
160,863
(841,976)
(3,437,032)
(18,987,830)
(1,500,000)
(182,656)
19,516,977
(1,153,509)
28,372,983
(1,255,748)
(60,000)
5,945,003
(1,918,894)
31,083,344
26,492,803
329,196
226,304
27,048,303
175,153
(938,779)
4,635
(236,313)
(995,304)
(2,574,869)
(1,118,343)
(410,000)
162,236
(3,940,976)
2,566,185
(64,823)
120,000
2,625,965
-
5,247,327
311,047
18,149
-
329,196
The consolidated statement of cash flows is to be read in conjunction with the attached notes to the financial
statements
Page 35
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Notes to the Financial Statements for the year ended 30 June 2018
These consolidated financial statements and notes represent those of Artemis Resources Limited and Controlled
Entities (the “Consolidated Group” or “Group”). The separate financial statements of the parent entity, Artemis
Resources Limited, have not been presented within this financial report as permitted by the Corporations Act 2001.
The financial statements were authorised for issue on 28 September 2018 by the Directors of the Company.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BASIS OF PREPARATION
The financial report is a general purpose financial report that has been prepared in accordance with Australian
Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian
Accounting Standards Board, International Financial Reporting Standards as issued by the International Accounting
Standards Board and the Corporations Act 2001. The Group is a for profit entity for financial reporting purposes
under Australian Accounting Standards.
Australian Accounting Standards set out accounting policies that the AASB has concluded would result in a financial
report containing relevant and reliable information about transactions, events and conditions. Compliance with
Australian Accounting Standards ensures that the financial statements and notes also comply with International
Financial Reporting Standards. Material accounting policies adopted in the preparation of this financial report are
presented below and have been consistently applied unless otherwise stated.
The financial report has been prepared on an accruals basis and is based on historical costs, modified, where
applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities.
The financial statements are presented in Australian dollars which is the Company’s functional and presentation
currency.
a. Principles of Consolidation
The consolidated financial statements incorporate the assets, liabilities and results of entities controlled by
Artemis Resources Limited at the end of the reporting period. A controlled entity is any entity over which
Artemis Resources Limited has the ability and right to govern the financial and operating policies so as to
obtain benefits from the entity’s activities.
Where controlled entities have entered or left the Group during the year, the financial performance of
those entities is included only for the period of the year that they were controlled. A list of controlled
entities is contained in Note 14 to the financial statements.
In preparing the consolidated financial statements, all inter-group balances and transactions between
entities in the consolidated group have been eliminated in full on consolidation.
Non-controlling interests, being the equity in a subsidiary not attributable, directly or indirectly, to a parent,
are reported separately within the equity section of the consolidated statement of financial position and
consolidated statement of comprehensive income. The non-controlling interests in the net assets comprise
their interests at the date of the original business combination and their share of changes in equity since
that date.
Business Combinations
Business combinations occur where an acquirer obtains control over one or more businesses.
A business combination is accounted for by applying the acquisition method, unless it is a combination
involving entities or businesses under common control. The business combination will be accounted for
from the date that control is attained, whereby the fair value of the identifiable assets acquired and
liabilities (including contingent liabilities) assumed is recognised (subject to certain limited exemptions).
Page 36
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
When measuring the consideration transferred in the business combination, any asset or liability resulting
from a contingent consideration arrangement is also included. Subsequent to initial recognition, contingent
consideration classified as equity is not remeasured and its subsequent settlement is accounted for within
equity. Contingent consideration classified as an asset or liability is remeasured each reporting period to
fair value, recognising any change to fair value in profit or loss, unless the change in value can be identified
as existing at acquisition date.
All transaction costs incurred in relation to the business combination are expensed to the consolidated
statement of comprehensive income.
The acquisition of a business may result in the recognition of goodwill or a gain from a bargain purchase.
b. Going concern
The financial statements have been prepared on the going concern basis, which contemplates continuity of
normal business activities and the realisation of assets and discharge of liabilities in the normal course of
business.
As disclosed in the financial statements, the consolidated entity made a profit of $12,073,913, had net cash
outflows from operating activities of $3,437,032 and investing activities of $1,153,509 for the year ended
30 June 2018, and had a working capital surplus as at 30 June 2018 of $17,955,416.
Notwithstanding positive results for the year the Group is not yet producing and therefore there is some
uncertainty that the Company and consolidated entity will continue as a going concern and realise its assets
and discharge its liabilities in the ordinary course of business.
The Directors believe that it is reasonably foreseeable that the company and consolidated entity will
continue as a going concern and that it is appropriate to adopt the going concern basis in the preparation of
the financial report after consideration of the following factors:
•
•
•
The consolidated entity has cash at bank at balance date of $27,048,303 and net assets of
$58,610,558 as at 30 June 2018;
The ability of the consolidated entity to scale back certain parts of their activities that are non-
essential so as to conserve cash; and
The consolidated entity retains the ability, if required, to wholly or in part dispose of interests in
mineral exploration and development assets.
Accordingly, the Directors believe that the company and consolidated entity will be able to continue as
going concerns and that it is appropriate to adopt the going concern basis in the preparation of the financial
report.
The financial report does not include any adjustments relating to the amounts or classification of recorded
assets or liabilities that might be necessary if the company and consolidated entity do not continue as going
concerns.
c. New accounting standards for application in future periods
Accounting Standards and Interpretations issued by the AASB that are not yet mandatorily applicable to
the Group, together with an assessment of the potential impact of such pronouncements on the Group
when adopted in future periods, are discussed below:
Page 37
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
AASB 9: Financial Instruments and associated Amending Standards (applicable to annual reporting periods
beginning on or after 1 January 2018).
The Standard will be applicable retrospectively (subject to the provisions on hedge accounting outlined
below) and includes revised requirements for the classification and measurement of financial instruments,
revised recognition and derecognition requirements for financial instruments and simplified requirements
for hedge accounting.
The key changes that may affect the Group on initial application include certain simplifications to the
classification of financial assets, simplifications to the accounting of embedded derivatives, upfront
accounting for expected credit loss, and the irrevocable election to recognise gains and losses on
investments in equity instruments that are not held for trading in other comprehensive income. AASB 9
also introduces a new model for hedge accounting that will allow greater flexibility in the ability to hedge
risk, particularly with respect to hedges of non-financial items. Should the entity elect to change its hedge
policies in line with the new hedge accounting requirements of the Standard, the application of such
accounting would be largely prospective.
The directors anticipate that the adoption of AASB 9 will not have a significant impact on the Group’s
financial statements.
AASB 15 Revenue from Contracts with Customers (applicable to annual reporting periods beginning on or
after 1 January 2018).
AASB 15 Replaces AASB 118 Revenue, AASB 111 Construction Contracts and some revenue-related
Interpretations:
o
o
o
o
establishes a new revenue recognition model
changes the basis for deciding whether revenue is to be recognised over time or at a point in time
provides new and more detailed guidance on specific topics (e.g. multiple element arrangements,
variable pricing, rights of return, warranties and licensing)
expands and improves disclosures about revenue
The entity is yet to undertake a detailed assessment of the impact of AASB 15. However, based on the
entity’s preliminary assessment, the likely impact on the first time adoption of the Standard for the year
ending 30 June 2019 includes:
•
Change in timing of income recognition depending on performance consideration in the Group’s
contracts; and
Change in income measurement for possible variable consideration in the Group’s contracts.
•
AASB 16 Leases (applicable to annual reporting periods beginning on or after 1 January 2018).
AASB 16:
•
•
•
•
•
Replaces AASB 117 Leases and some lease-related Interpretations
requires all leases to be accounted for ‘on-balance sheet’ by lessees, other than short-term and
low value asset leases
provides new guidance on the application of the definition of lease and on sale and lease back
accounting
largely retains the existing lessor accounting requirements in AASB 117
requires new and different disclosures about leases
When this Standard is first adopted for the year ending 30 June 2020, there will be no material impact on
the transactions and balances recognised in the financial statements.
d.
Income taxes
The income tax expense (revenue) for the year comprises current income tax expense (income) and
deferred tax expense (income). Current income tax expense charged to the profit or loss is the tax payable
on taxable income calculated using applicable income tax rates enacted, or substantially enacted, as at
Page 38
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
reporting date. Current tax liabilities (assets) are therefore measured at the amounts expected to be paid
to (recovered from) the relevant taxation authority.
Deferred income tax expense reflects movements in deferred tax asset and deferred tax liability balances
during the year as well unused tax losses. Current and deferred income tax expense (income) is charged or
credited directly to equity instead of the profit or loss when the tax relates to items that are credited or
charged directly to equity. Deferred tax assets and liabilities are ascertained based on temporary
differences arising between the tax bases of assets and liabilities and their carrying amounts in the financial
statements. Deferred tax assets also result where amounts have been fully expensed but future tax
deductions are available. No deferred income tax will be recognised from the initial recognition of an asset
or liability, excluding a business combination, where there is no effect on accounting or taxable profit or
loss.
Deferred tax assets and liabilities are calculated at the tax rates that are expected to apply to the period
when the asset is realised or the liability is settled, based on tax rates enacted or substantively enacted at
reporting date. Their measurement also reflects the manner in which management expects to recover or
settle the carrying amount of the related asset or liability. Deferred tax assets relating to temporary
differences and unused tax losses are recognised only to the extent that it is probable that future taxable
profit will be available against which the benefits of the deferred tax asset can be utilised. Where temporary
differences exist in relation to investments in subsidiaries, branches, associates, and joint ventures,
deferred tax assets and liabilities are not recognised where the timing of the reversal of the temporary
difference can be controlled and it is not probable that the reversal will occur in the foreseeable future.
Current tax assets and liabilities are offset where a legally enforceable right of set-off exists and it is
intended that net settlement or simultaneous realisation and settlement of the respective asset and liability
will occur. Deferred tax assets and liabilities are offset where a legally enforceable right of set-off exists,
the deferred tax assets and liabilities relate to income taxes levied by the same taxation authority on either
the same taxable entity or different taxable entities where it is intended that net settlement or
simultaneous realisation and settlement of the respective asset and liability will occur in future periods in
which significant amounts of deferred tax assets or liabilities are expected to be recovered or settled.
e. Exploration and evaluation costs
Exploration, evaluation and development expenditure incurred is accumulated in respect of each
identifiable area of interest. These costs are only carried forward to the extent that they are expected to
be recouped through the successful development of the area or where activities in the area have not yet
reached a stage that permits reasonable assessment of the existence of economically recoverable reserves.
Accumulated costs in relation to an abandoned area are written off in full against profit in the year in which
the decision to abandon the area is made.
When production commences, the accumulated costs for the relevant area of interest are amortised over
the life of the area according to the rate of depletion of the economically recoverable reserves. A regular
review is undertaken of each area of interest to determine the appropriateness of continuing to carry
forward costs in relation to that area of interest. Costs of site restoration are provided over the life of the
facility from when exploration commences and are included in the costs of that stage. Site restoration costs
include the dismantling and removal of mining plant, equipment and building structures, waste removal,
and rehabilitation of the site in accordance with clauses of the mining permits. Such costs have been
determined using estimates of future costs, current legal requirements and technology on an undiscounted
basis.
Any changes in the estimates for the costs are accounted on a prospective basis. In determining the costs
of site restoration, there is uncertainty regarding the nature and extent of the restoration due to community
expectations and future legislation. Accordingly the costs have been determined on the basis that the
restoration will be completed within one year of abandoning the site.
Page 39
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
f.
Leases
A distinction is made between finance leases which transfer from the lessor to the lessee substantially all
the risks and rewards incident to ownership of the leased asset and operating leases under which the lessor
retains substantially all the risks and rewards.
Where an asset is acquired by means of a finance lease, the fair value of the leased property or the present
value of minimum lease payments, if lower, is established as an asset at the beginning of the lease term. A
corresponding liability is also established and each lease payment is apportioned between the finance
charge and the reduction of the outstanding liability.
Operating lease rental expense is recognised as an expense on a straight line basis over the lease term, or
on a systematic basis more representative of the time pattern of the user's benefit.
g. Financial Instruments
Recognition and initial measurement
Financial assets and financial liabilities are recognised when the entity becomes a party to the contractual
provisions to the instrument. For financial assets, this is equivalent to the date that the company commits
itself to either the purchase or sale of the asset (i.e. trade date accounting is adopted).
Financial instruments are initially measured at fair value plus transaction costs, except where the
instrument is classified “at fair value through profit or loss”, in which case transaction costs are expensed
to profit or loss immediately.
Classification and subsequent measurement
Financial instruments are subsequently measured at fair value, amortised cost using the effective interest
rate method, or cost.
Amortised cost is the amount at which the financial asset or financial liability is measured at initial
recognition less principal repayments and any reduction for impairment, and adjusted for any cumulative
amortisation of the difference between that initial amount and the maturity amount calculated using the
effective interest method.
Fair value is determined based on current bid prices for all quoted investments. Valuation techniques are
applied to determine the fair value for all unlisted securities, including recent arm’s length transactions,
reference to similar instruments and option pricing models.
The effective interest method is used to allocate interest income or interest expense over the relevant
period and is equivalent to the rate that discounts estimated future cash payments or receipts (including
fees, transaction costs and other premiums or discounts) through the expected life (or when this cannot be
reliably predicted, the contractual term) of the financial instrument to the net carrying amount of the
financial asset or financial liability. Revisions to expected future net cash flows will necessitate an
adjustment to the carrying value with a consequential recognition of an income or expense item in profit
or loss.
The Group does not designate any interests in subsidiaries, associates or joint venture entities as being
subject to the requirements of Accounting Standards specifically applicable to financial instruments.
(
(i) Financial assets at fair value through profit or loss
i
Financial assets are classified at “fair value through profit or loss” when they are held for trading for the
)
purpose of short-term profit taking, derivatives not held for hedging purposes, or when they are designated
as such to avoid an accounting mismatch or to enable performance evaluation where a Group of financial
assets is managed by key management personnel on a fair value basis in accordance with a documented
risk management or investment strategy. Such assets are subsequently measured at fair value with changes
in carrying value being included in profit or loss.
Page 40
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
(ii) Loans and receivables
Loans and receivables are non-derivative financial assets with fixed or determinable payments that are not
quoted in an active market and are subsequently measured at amortised cost.
Loans and receivables are included in current assets, where they are expected to mature within 12 months
after the end of the reporting period.
(iii) Held-to-maturity investments
Held-to-maturity investments are included in non-current assets where they are expected to mature within
12 months after the end of the reporting period. All other investments are classified as current assets.
(iv) Available-for-sale financial assets
Available-for-sale financial assets are non-derivative financial assets that are either not suitable to be
classified into other categories of financial assets due to their nature, or they are designated as such by
management. They comprise investments in the equity of other entities where there is neither a fixed
maturity nor fixed or determinable payments.
They are subsequently measured at fair value with changes in such fair value (i.e. gains or losses) recognised
in other comprehensive income (except for impairment losses and foreign exchange gains and losses).
When the financial asset is derecognised, the cumulative gain or loss pertaining to that asset previously
recognised in other comprehensive income is reclassified into profit or loss.
Available-for-sale financial assets are included in non-current assets where they are expected to be sold
within 12 months after the end of the reporting period. All other financial assets are classified as current
assets.
(v) Financial liabilities
Non-derivative financial liabilities (excluding financial guarantees) are subsequently measured at amortised
cost.
Impairment
At the end of each reporting period, the Group assesses whether there is objective evidence that a financial
instrument has been impaired. In the case of available-for-sale financial instruments, a prolonged decline
in the value of the instrument is considered to determine whether an impairment has arisen. Impairment
losses are recognised in profit or loss. Also, any cumulative decline in fair value previously recognised in
other comprehensive income is reclassified to profit or loss at this point.
h.
Impairment of assets
At each reporting date, the group reviews the carrying values of its tangible and intangible assets to
determine whether there is any indication that those assets have been impaired. If such an indication exists,
the recoverable amount of the asset, being the higher of the asset’s fair value less costs to sell and value in
use, is compared to the asset’s carrying value. Any excess of the asset’s carrying value over its recoverable
amount is expensed to the consolidated statement of comprehensive income. Impairment testing is
performed annually for goodwill and intangible assets with indefinite lives.
Where it is not possible to estimate the recoverable amount of an individual asset, the group estimates the
recoverable amount of the cash-generating unit to which the asset belongs. In the case of available-for-
sale financial instruments, a prolonged decline in the value of the instrument is considered to determine
whether impairment has arisen.
i. Plant and equipment
Each class of plant and equipment is carried at cost or fair value as indicated less, where applicable, any
accumulated depreciation and impairment losses. Plant and equipment are measured on the cost basis.
Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow to
Page 41
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
the company and the cost of the item can be measured reliably. All other repairs and maintenance are
charged to the income statement during the financial period in which they are incurred.
Depreciation
The depreciable amount of all fixed assets is depreciated on a diminishing value basis over the asset’s useful
life to the company commencing from the time the asset is held ready for use.
Depreciation is calculated on a diminishing-value basis over the estimated useful life of the assets as follows:
Plant and equipment – ranging from 2 to 20 years
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying
amount is greater than its estimated recoverable amount.
j. Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits held at call with banks, other short-term highly
liquid investments with original maturities of 3 months or less, and bank overdrafts. Bank overdrafts are
shown within short-term borrowings in current liabilities on the consolidated statement of financial
position.
k. Revenue recognition
Interest revenue is recognised using the effective interest method. It includes the amortisation of any
discount or premium.
l. Borrowing costs
Borrowing costs are recognised as an expense in the period in which they are incurred except borrowing
costs that are directly attributable to the acquisition, construction or production of an asset that necessarily
takes a substantial period to get ready for its intended use or sale. In this case the borrowing costs are
capitalised as part of the cost of such a qualifying asset.
The amount of borrowing costs relating to funds borrowed generally and used for the acquisition of
qualifying assets has been determined by applying a capitalisation rate to the expenditures on those assets.
The capitalisation rate comprises the weighted average of borrowing costs incurred during the period.
m. Equity settled compensation
Share-based payments to employees are measured at the fair value of the instruments issued and
amortised over the vesting periods. Share-based payments to non-employees are measured at the fair
value of goods or services received or the fair value of the equity instruments issued, if it is determined the
fair value of the goods or services cannot be reliably measured, and are recorded at the date the goods or
services are received. The corresponding amount is recorded to the option reserve. The fair value of
options is determined using the Black-Scholes pricing model. The number of shares and options expected
to vest is reviewed and adjusted at the end of each reporting period such that the amount recognised for
services received as consideration for the equity instruments granted is based on the number of equity
instruments that eventually vest.
n. Goods and services tax (GST)
Revenues, expenses and assets are recognised net of the amount of GST, except where the amount of GST
incurred is not recoverable from the Australian Tax Office. In these circumstances the GST is recognised as
part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in
the consolidated statement of financial position are shown inclusive of GST. Cash flows are presented in
the consolidated statement of cash flows on a gross basis, except for the GST component of investing and
financing activities, which are disclosed as operating cash flows.
Page 42
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
o. Comparative figures
When required by Accounting Standards, comparative figures have been adjusted to conform to changes
in presentation for the current financial year.
p. Significant judgements and key assumptions
The directors evaluate estimates and judgements incorporated into the financial report based on historical
knowledge and best available current information. Estimates assume a reasonable expectation of future
events and are based on current trends and economic data, obtained both externally and within the group.
q. Key judgements
The Group capitalises expenditure relating to exploration and evaluation, and development, where it is
considered likely to be recoverable or where the activities have not reached a stage which permits a
reasonable assessment of the existence of reserves. While there are certain areas of interest from which
no reserves have been extracted, the directors are of the continued belief that such expenditure should not
be written off since feasibility studies in such areas have not yet concluded. Such capitalised expenditure
is carried at reporting date at $40,474,892.
2. REVENUE AND OTHER INCOME
a) Revenue
Other income¹
Less applied as recovery of exploration costs
Add profit on sale of Novo shares net of costs
Sales of gold, silver and copper ore
Profit on sale of other investments
Unrealised foreign exchange gain
Consolidated
2018
$
Consolidated
2017
$
16,606,896
(1,559,575)
15,047,321
3,499,502
18,546,823
221,041
44,162
172,206
18,984,232
165,974
-
-
-
165,974
462,883
-
-
628,857
¹In 2018 this amount is the non-cash fee received from Novo Resources Corp. for entering into the
conglomerate gold joint venture.
b) Other Income
Interest received
160,863
4,635
Page 43
3. INCOME TAXES
Reconciliation between income tax expense and prima facie tax on accounting loss:
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Profit/(loss) before tax
Tax at 27.5% (2017: 27.5%)
Tax effect of non-deductible expenses
Exploration expenditure
Tax losses and timing differences not brought to
account
Previously unrecognised tax losses and timing
differences now recouped to reduce tax expense
Income tax expense
Consolidated
2018
$
Consolidated
2017
$
12,073,913
3,320,326
735,462
(3,045,162)
(2,178,504)
(599,089)
427,600
(1,101,474)
-
1,272,963
(1,010,626)
-
-
-
Applicable tax rate
The applicable tax rate is 27.5%, the small business national corporate tax rate in Australia.
Analysis of deferred tax assets
No deferred tax assets have been recognised as yet, other than to offset deferred tax liabilities, as it is currently not
probable that future taxable profit will be available to realise the asset. Potential deferred tax assets on carry
forward losses amount to $4,814,858 (2017-$5,925,343).
4. CASH AND CASH EQUIVALENTS
Cash and cash equivalents consist of cash on hand and account balances with banks and investments in money
market instruments, net of outstanding bank overdrafts. Cash and cash equivalents included in the consolidated
statement of cash flows comprise the following amounts:
Cash and cash equivalents
5. TRADE AND OTHER RECEIVABLES
Current
Trade receivables
GST receivable
Other
Consolidated
2018
$
27,048,303
Consolidated
2017
$
329,196
Consolidated
2018
$
Consolidated
2017
$
133,838
1,337,115
375,179
1,846,132
316,870
294,482
5,260
616,612
The value of trade and other receivables considered by the Directors to be past due or impaired is nil (2017: Nil).
Page 44
6. OTHER FINANCIAL ASSE TS
Current
Available-for-sale financial assets
Listed equity securities – at fair value
7. PLANT AND EQUIPMENT
Cost
Opening balance, 1 July 2016
Additions
Closing balance, 30 June 2017
Opening balance, 1 July 2017
Additions
Closing balance, 30 June 2018
Depreciation
Opening balance, 1 July 2016
Depreciation
Closing balance, 30 June 2017
Opening balance, 1 July 2017
Depreciation
Closing balance, 30 June 2018
Written Down Value 30 June 2017
Written down value 30 June 2018
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Consolidated
2018
$
Consolidated
2017
$
430,730
103,904
Plant and
Equipment
Software
-
-
-
-
94,840
94,840
-
-
-
-
(3,841)
(3,841)
-
90,999
-
-
-
-
90,883
90,883
-
-
-
-
(7,632)
(7,632)
-
83,251
Motor
vehicles
-
10.000
10,000
10,000
-
10,000
-
(2,000)
(2,000)
(2,000)
(2,000)
(4,000)
8,000
6,000
Total
-
10,000
10,000
10,000
185,723
195,723
-
(2,000)
(2,000)
(2,000)
(13,473)
(15,473)
8,000
180,250
8. EXPLORATION, EVALUATION AND DEVELOPMENT EXPENDITURE
Opening balance, 1 July 2016
Acquisition of tenements and project interests
Expenditure capitalised in current period
Cost of product sold written off
Closing balance, 30 June 2017
Opening balance, 1 July 2017
Acquisition of tenements and project interests
Expenditure capitalised in current period
Exploration expenditure written off
Cost of product sold written off
Closing balance, 30 June 2018
Total
1,631,509
3,435,731
4,087,053
(161,588)
8,992,705
8,992,705
10,220,000
21,436,671
(202,445)
(174,214)
40,474,892
Page 45
9. TRADE AND OTHER PAYABLES
Trade and other accounts payable
(unsecured)
10. EMPLOYEE BENEFITS OBLIGATIONS
Provision for annual leave
Opening balance
Provision for the year
Closing balance
11. BORROWINGS
Convertible note
Opening balance borrowings
Convertible note
Less guarantee held by noteholder
Less conversion to equity
Less cash repayment
Foreign exchange gain
Other borrowings
Short term loan
Repayment short term loan
Closing balance borrowings
Current liabilities
Convertible note
Short term loan
Total current liabilities
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Consolidated
2018
$
Consolidated
2017
$
7,446,797
1,860,339
Consolidated
2018
$
-
8,928
8,928
Consolidated
2017
$
-
-
-
Consolidated
2018
$
Consolidated
2017
$
2,265,965
5,945,303
-
8,211,268
(2,232,791)
(1,918,894)
(145,559)
3,914,024
60,000
(60,000)
-
3,914,024
-
2,625,965
(360,000)
2,265,965
-
-
-
2,265,965
60,000
-
60,000
2,325,965
3,914,024
-
3,914,024
2,265,965
60,000
2,325,965
The convertible note is for an amount of US$4,500,000 (A$5,945,303). The convertible note can be converted at
the noteholder’s election at the lower of 35.75 cents per share or 93% of the 10 day weighted volume average
price prior to the date of conversion. The borrower has an option to repay the loan in cash in the event the share
price is less than 36.4 cents per share at a premium of 15%. The convertible note is unsecured and expires on 8
June 2019.
Advisors to the noteholder received 5,439,858 options on 31 January 2018. The options are exercisable at 45.38
cents on or before 31 January 2021.
The note outstanding as at 30 June 2017 was repaid in full, with US$200,000 being repaid in cash on 17 July 2017
and US$1,800,000 being converted with the issue of 19,959,802 shares (4,000,000 shares were issued as a
guarantee on 15 May 2017 and the balance were issued on 31 July, 2 August, 16 August and 11 September 2017).
Page 46
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Borrowings (continued)
An amount of US$964,284 was repaid against the convertible note outstanding as at 30 June 2018, on 2 July 2018,
1 August 2018 and 4 September 2018.
The short-term loan of $60,000 was repaid on 15 February 2018.
12. SHARE CAPITAL
633,293,770 (2017: 323,733,940 –
pre consolidation) fully paid ordinary
shares
2018
Shares
2017
Shares
2018
$
2017
$
633,293,770
323,733,940
79,127,027
39,067,554
Ordinary shares participate in dividends and the proceeds on winding up of the parent entity in proportion to the
number of shares held. At shareholders’ meetings each ordinary share is entitled to one vote when a poll is called,
otherwise each shareholder has one vote on a show of hands.
Reconciliation of movements in share capital during the year:
Reconciliation of movement during the period:
Opening balance
Shares issued in placement
Shares issued on exercise of options
Shares issued as consideration for acquisition
Shares issued as consideration for acquisition
Shares issued on settlement of convertible note
Shares issued to director as sign on fee
Cost of raising capital
Closing balance
Shares
323,733,940
148,696,682
104,192,990
25,000,000
8,000,000
18,670,158
5,000,000
-
633,293,770
$
39,067,554
25,500,000
3,337,429
7,000,000
1,720,000
2,232,792
1,525,000
(1,255,748)
79,127,027
Capital management
When managing capital, management's objective is to ensure the entity continues as a going concern as well as to
maintain optimal returns to shareholders and benefits for other stakeholders. Management also aims to maintain
a capital structure that ensures the lowest cost of capital available to the entity.
Management is constantly adjusting the capital structure to take advantage of favourable costs of capital or high
returns on assets. As the market is constantly changing, management may issue new shares or sell assets to reduce
debt.
There have been no changes in the strategy adopted by management to control the capital of the group since the
prior year. This strategy is to maintain share capital as dictated by operational requirements and market conditions.
Page 47
13. RESERVES
Share based payment reserve
Reconciliation of movements during the year:
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Consolidated
2018
$
724,999
Consolidated
2017
$
172,000
Share based payments reserve
Total options
2018
Options
2017
Options
2018
$
2017
$
37,689,858
101,002,903
255,909
172,000
Movement in option reserve during the year
Opening balance
Exercise of options at 2 cents each
Exercise of options at 15 cents each
Lapse of 2 cent options
Issue of options at average price of 12.5 cents
Exercise of options at average price 12.5 cents
Issue of director options - series 1
Issue of free options attached to share issue - series 2
Issue of advisor options – series 3
Issue of CEO options – series 4
Issue of CEO options – series 5
Closing balance
Number
101,002,903
(96,292,990)
(4,400,000)
(309,913)
4,000,000
(4,000,000)
6,000,000
11,250,000
5,439,858
10,000,000
5,000,000
37,689,858
$
172,000
-
(172,000)
-
90,000
(90,000)
172,302
-
77,212
4,512
1,883
255,909
Share based payments reserve
Total performance rights
15,000,000
-
469,090
-
2018
Performance rights
2017
2018
$
2017
$
Movement in performance rights during the year
Opening balance
Issued to directors
Issued to employees
Closing balance
Number
-
13,000,000
2,000,000
15,000,000
$
-
406,545
62,545
469,090
The following options are outstanding as at 30 June 2018
Series 1. 6,000,000 unlisted options granted 30 November 2017 exercisable at 44 cents per share before
30 June 2020
Series 2. 11,250,000 unlisted options granted 6 February 2018 exercisable at 25 cents per share before
6 February 2019
Series 3. 5,439,858 unlisted options granted 31 January 2018 exercisable at 45.38 cents before 31 January 2021
Series 4. 10,000,000 unlisted options granted 19 June 2018 exercisable at 27.39 cents per share before
19 June 2021
Series 5. 5,000,000 unlisted options granted 19 June 2018 exercisable at 40 cents per share before 19 June 2021
Page 48
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
The fair value of the equity-settled unlisted share options granted is estimated as at the date of grant using the
Black and Scholes model taking into account the terms and conditions upon which the options were granted.
Expected volatility (%)
Risk-free interest free (%)
Expected life of option (years)
Exercise price ($)
Grant date share price
Series 1²
142%
1.8%
2.58 years
44 cents
31.5 cents
Series 2¹
N/A
Series 3
100%
2.0%
3 years
45.38 cents
21.5 cents
Series 4²
90%
2.09%
3 years
27.39 cents
19 cents
Series 5²
90%
2.09%
3 years
40 cents
19 cents
¹Free attaching options to capital raise on 6 February 2018 on the basis of one option for every four new shares
issued.
²Options were valued by 22 Corporate Advisory Pty Ltd
Valuation of performance rights
Shareholders at a General Meeting on 8 September 2017 approved the grant of 15,000,000 performance rights to
Directors and employees. The performance rights were valued by 22 Corporate Advisory Pty Limited, at 8.6 cents a
share being the share price on grant date discounted for lack of marketability. Vesting occurs at the end of the
performance period ended 30 June 2019, if the following performance conditions are met:
Market-based performance conditions:
•
•
•
33.3% of the performance rights will vest when share price exceeds 15 cents; and
33.3% of the performance rights will vest when share price exceeds 20 cents; and
33.3% of the performance rights will vest when share price exceeds 25 cents.
Non-market based performance conditions:
The vesting of the performance rights is also subject to non-market conditions including capital raising,
occupational health and safety outcomes and corporate governance hurdles.
An expense of $469,091 was recognised for the period ended 30 June 2018 in relation to these performance rights.
14. SUBSIDIARIES
Parent Entity:
Artemis Resources Limited
Subsidiaries:
Fox Radio Hill Pty Limited
Karratha Metals Limited
KML No 2 Pty Limited
Armada Mining Pty Limited
Shearzone Mining Pty Limited
Western Metals Pty Limited
Elysian Resources Pty Limited
Hardrock Resources Pty Limited
SMA Mining Pty Limited
Artemis Graphite Pty Ltd
Artemis Management Services Pty Ltd
Anco Holdings Limited
Country of
Incorporation
Ownership %
2018
Ownership %
2017
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Australia
Hong Kong
-
100
100
100
100
100
80
100
100
5
100
100
-
-
100
100
100
100
100
80
-
-
5
100
-
49
Consolidated
The parent entity within the group is Artemis Resources Limited which is the ultimate parent entity in Australia.
Page 49
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
15. BUSINESS COMBINATION
On 8 December 2017 Artemis finalised the acquisition of Elysian Resources Pty Limited and Hardrock Resources
Pty Limited for 33 million ordinary shares and a cash payment of $1,500,000.
Details of the purchase consideration and net assets are as follows:
Purchase consideration:
Tranche 1 – 8 December 2017
33,000,000 shares (25,000,000 at a deemed price of 28
cents per share and 8,000,000 at a deemed price of 21.5
cents per share)
Cash
$
8,720,000
1,500,000
10,220,000
The assets and liabilities recognised as a result of the acquisition are as follows:
Capitalised exploration
10,220,000
Exploration costs on tenements acquired subsequent to acquisition amounted to $701,806. In the event that the
acquisition was consummated on 1 July 2017, exploration on acquired tenements would have been a further
$102,470. There were no revenues or expenses charged to profit and loss by the acquired company during the
year.
The values identified in relation to the acquisition of the above businesses are provisional as at 30 June 2018. For
a further understanding of the provisional basis, refer to the business combination accounting policy which states
that business combinations are initially accounted for on a provisional basis. The acquirer retrospectively adjusts
the provisional amounts recognised and also recognises additional assets or liabilities during the measurement
period, based on new information obtained about the facts and circumstances that existed at acquisition date.
The measurement period ends on either the earlier of (i) 12 months from the date of acquisition or (ii) when the
acquirer receives all the information possible to determine the value.
16. FINANCIAL INSTRUMENTS
The Board of Directors takes responsibility for managing financial risk exposures of the Group. The Board monitors
the Group’s financial risk management policies and exposures and approves financial transactions. It also reviews
the effectiveness of internal controls relating to commodity price risk, counterparty credit risk, currency risk, liquidity
risk and interest rate risk. The Board meets monthly at which these matters are reviewed.
The Board’s overall risk management strategy seeks to assist the Consolidated Group in meeting its financial targets,
while minimising potential adverse effects on financial performance. Its review includes the use of hedging
derivative instruments, credit risk policies and future cash flow requirements.
The Company’s principal financial instruments comprise cash, short term deposits and securities in Australian listed
companies. The main purpose of the financial instruments is to earn the maximum amount of interest at a low risk
to the company. The Company also has other financial instruments such as trade debtors and creditors which arise
directly from its operations. For the period under review, it has been the Company’s policy not to trade in financial
instruments. The Company holds financial instruments in the form of shares in Australian listed companies with the
aim of trading these shares to generate a profit.
The main risks arising from the Company’s financial instruments are interest rate risk and credit risk and market risk.
The Board reviews and agrees policies for managing each of these risks and they are summarised below:
Page 50
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Interest Rate Risk
(a)
The Company’s exposure to interest rate risk is the risk that a financial instrument’s value will fluctuate as a result
of changes in market interest rates and the effective weighted average interest rate for each class of financial assets
and financial liabilities. The Company does not have short or long term debt, and therefore this risk is minimal.
At balance sheet date, the Company had the following financial assets and liabilities exposed to interest rate risk
that are not designated as cash flow hedges:
Financial Assets
Cash and cash equivalents
Consolidated
2018
$
Consolidated
2017
$
27,048,303
329,196
(b) Credit Risk
Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting in financial loss
to the Company. The Company has adopted the policy of only dealing with credit worthy counterparties and
obtaining sufficient collateral or other security where appropriate, as a means of mitigating the risk of financial loss
from defaults.
The Company does not have any significant credit risk exposure to any single counterparty or any group of
counterparties having similar characteristics. The carrying amount of financial assets recorded in the financial
statements, net of any provisions for losses, represents the Company’s maximum exposure to credit risk.
Foreign exchange risk
(c)
The Company had the following United States dollar denominated assets and liabilities at year end.
Consolidated
2018
US$
Consolidated
2017
US$
Cash
Cash and cash equivalents
Borrowing
Convertible note liability
¹The convertible note holder held 4,000,000 shares as collateral against this
liability in the prior year
1,866,360
2,892,855
-
2,000,000¹
Net impact of
strengthening/(weakening)
of Australian dollar on US $
assets/liabilities outlined
above
2018
2017
Foreign exchange risk
-5%
Foreign exchange risk
+5%
Profit
$
Equity
$
Profit
$
(77,158)
(77,158)
77,158
Equity
$
77,158
(144,450)
(144,450)
144,450
144,450
Equity securities price risk
(d)
Equity securities price risk arises from investments in listed equity securities. The Group is exposed to equity price
risk arising from its equity investments. Equity investments are held for trading purposes. The Group does not
actively trade these investments and no hedging or derivative transactions have been used to manage equity price
risk.
Page 51
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Sensitivity analysis
(e)
The following tables summarise the sensitivity of the Group’s financial assets and liabilities to interest rate risk. Had
the relevant variables, as illustrated in the tables, moved, with all other variables held constant, post tax profit and
equity would have been affected as shown. The analysis has been performed on the same basis for 2018 and 2017.
In the current year the Company holds a number of investments in ASX listed companies.
Consolidated
30 June 2018
Financial Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Financial Liabilities
Trade and other payables
Borrowings
Total increase / (decrease)
Footnote
1
2
3
4
5
Carrying
Amount
$
Interest Rate Risk
-1%
Interest Rate Risk
+1%
Profit
$
Equity
$
Profit
$
Equity
$
27,048,303
(270,483)
(270,483)
270,483
270,483
1,846,132
430,730
7,446,797
3,914,024
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(270,483)
(270,483)
270,483
270,483
Consolidated
30 June 2017
Financial Assets
Cash and cash equivalents
Trade and other receivables
Other financial assets
Financial Liabilities
Trade and other payables
Borrowings
Total increase / (decrease)
Footnote
1
2
3
4
5
Carrying
Amount
$
Interest Rate Risk
-1%
Interest Rate Risk
+1%
Profit
$
Equity
$
Profit
$
Equity
$
329,196
616,612
103,904
1,860,339
2,325,955
(3,292)
(3,292)
3,292
3,292
-
-
-
-
-
-
-
-
-
-
-
-
(600)
(600)
(3,892)
(3,892)
600
3,892
600
3,892
1. Cash and cash equivalents are denominated in AUD and US$ and include deposits at call at floating and short-term fixed
interest rates. At 30 June 2018, $2,892,855 was denominated in US $ (30 June 2017 -$Nil).
2. Trade and other receivables are denominated in AUD and are not interest bearing.
3. Other financial assets are equity securities listed on the ASX (2017 – on the London AIM) and are denominated in
Australian Dollars (2017-Pounds Sterling).
4. Trade and other payables at balance date are denominated mainly in AUD and are not interest bearing.
5. The convertible note has no interest coupon. Loan of $60,000 in 2017 bears an interest rate of 10% per annum.
Liquidity risk
(f)
The consolidated entity’s objective is to maintain a balance between continuity of funding and flexibility through the
use of bank loans, convertible notes and finance leases. Cash flows from financial assets reflect management’s
expectation as to the timing of realisation. Actual timing may therefore differ from that disclosed. The timing of
cash flows presented in the table to settle financial liabilities reflects the earliest contractual settlement dates and
does not reflect management’s expectations that banking facilities will roll forward.
The tables below reflect an undiscounted contractual maturity analysis for financial liabilities.
Page 52
Consolidated Group
Within 1 year
2018
$
2017
$
1 to 5 years
2017
$
2018
$
Over 5 years
2018
$
2017
$
Total
2018
$
2017
$
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Financial liabilities -
due for payment:
Trade and other
payables
Borrowings
Total contractual
outflows
Cash and cash
equivalents
Trade and other
receivables
Financial assets
Total anticipated
inflows
Net
inflow/(outflow) on
financial
instruments
7,446,797
1,800,339
3,914,024
2,325,965
11,360,821
4,126,304
27,048,303
329,196
1,846,132
430,730
616,612
103,904
29,325,165
1,049,712
17,964,344
(3,076,592)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
7,446,797
1,800,339
3,914,024
2,325,965
11,360,821
4,126,304
27,048,303
329,196
1,846,132
430,730
616,612
103,904
29,325,165
1,049,712
-
17,964,344
(3,076,592)
Management and the Board monitor the Group’s liquidity reserve on the basis of expected cash flow. The
information that is prepared by senior management and reviewed by the Board includes:
Annual cash flow budgets;
(i)
(ii) Monthly rolling cash flow forecasts.
Net fair values
(g)
The carrying amount of financial assets and financial liabilities recorded in the financial statements represents their
respective net fair values, determined in accordance with the accounting policies disclosed in Note 1.
17. COMMITMENTS FOR EXPENDITURE
The Consolidated Group currently has commitments for expenditure at 30 June 2018 on its Australian exploration
tenements as follows:
Not later than 12 months
Between 12 months and 5 years
Greater than 5 years
Consolidated
Group
2018
$
Consolidated
Group
2017
$
2,644,580
6,212,995
4,622,701
13,540,276
1,829,114
6,471,414
4,695,294
12,995,822
The Company evaluates its tenements and exploration programme on an annual basis and may elect not to renew
tenement licences if it deems appropriate.
Page 53
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
18. CONTINGENT LIABILITIES AND CONTINGENT ASSETS
The Company has no contingent assets or liabilities.
19. RELATED PARTY DISCLOSURES
(a) Refer to the Remuneration Report contained in the Directors’ Report for details of the remuneration paid or
payable to each member of the Group’s Key Management Personnel for the year ended 30 June 2018. Key
Management Personnel for the year ended 30 June 2018 comprised the Directors, the Chief Executive Officer,
General Manager Exploration and the General Manager Operations.
(b) The total remuneration paid to Key Management Personnel of the Company and the Group during the year are
as follows:
Short term employee benefits
Share based payments
Superannuation
Consolidated Group
2018
$
768,735
1,916,615
694
2,686,044
2017
$
367,282
1,100,000
-
1,467,282
The Company contracts with third parties for the provision of all administrative and support services and geological
consulting support services.
Remuneration options: granted and vested during the financial period ending 30 June 2018
(c)
Details of share based payments during the year comprising 15,000,000 performance rights and 6,000,000
Options to directors and 15,000,000 options to the Chief Executive Officer are contained in Note 23 to the
financial statements.
Share and option holdings
(d)
All equity dealings with directors have been entered into with terms and conditions no more favourable
than those that the entity would have adopted if dealing at arm’s length.
(e)
Related party transactions
Consolidated
Group
2018
$
Consolidated
Group
2017
$
Expenses
ADK Mining Services Pty Ltd
Aetos Consulting Limited²
Doraleda Pty Limited ³
125,550
47,414
112,318
285,282
¹ Directors fees and consulting fees paid to ADK Mining Services Pty Ltd, a company in which Mr Alex Duncan-Kemp has an
220,700
-
250,727
471,427
interest.
² Consulting fees paid to Aetos Consulting Limited, a company in which Mr Frangeskides has an interest.
³ Directors fees and consulting fees paid to Doraleda Pty Limited, a company in which Mr Mead has an interest.
Page 54
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
20. SEGMENT INFORMATION
The consolidated entity operates in Australia in mineral and mining exploration. As at 30 June 2018 the Company is
solely focused on exploration in the West Pilbara for gold, cobalt, base metals, platinum and platinum group
elements.
Consolidated
2018
$
2017
$
Segment Revenue
External segment revenue
Segment expenses from
- continuing operating activities
Profit/(loss) before income tax
Income tax benefit
Profit/(loss) after income tax
Assets
Segment Assets
Total assets
Liabilities
Segment Liabilities
Total Liabilities
An analysis of segment assets is as follows:
Assets
Exploration assets
West Pilbara
Mt Clement-Paulsens
Total exploration assets
Development assets
Fox Radio Hill processing plant
Unallocated assets
Cash, receivables, investments and plant
and equipment
TOTAL ASSETS
21. EARNINGS PER SHARE
19,145,095
633,492
(7,071,182)
12,073,913
(2,666,026)
(2,178,504)
-
12,073,913
-
(2,178,504)
69,980,307
69,980,307
10,050,417
10,050,417
11,369,749
11,369,749
4,126,304
4,126,304
28,608,305
147,442
28,755,747
11,719,145
7,792,894
46,196
7,839,090
-
29,505,415
69,980,307
2,211,327
10,050,417
Reconciliation of earnings per share
Basic earnings per share
Diluted earnings per share
Profit/(Loss) used in the calculation of the basic earnings
per share
Weighted average number of ordinary shares:
Used in calculating basic earnings per ordinary share
Dilutive potential ordinary shares
Used in calculating diluted earnings per share
Consolidated
2018
Cents
2017
Cents
2.22
2.02
(0.95)
(0.95)
12,073,913
(2,178,504)
No of shares
No of shares
544,638,771
52,688,858
597,327,629
229,366,200
-
229,366,200
Page 55
22. AUDITOR’S REMUNERATION
Auditor of parent entity
Audit fees – Hall Chadwick
Other services
Total
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Consolidated
2018
$
36,528
11,192
47,720
2017
$
28,500
2,000
30,500
For the year ended 30 June 2018 the auditor appointed is Hall Chadwick.
23. SHARE BASED PAYMENTS
Goods or services received or acquired in a share-based payment transaction are recognised as an increase in equity
if the goods or services were received in an equity-settled share-based payment transaction or as a liability if the
goods and services were acquired in a cash settled share-based payment transaction.
For equity-settled share-based transactions, goods or services received are measured directly at the fair value of the
goods or services received provided this can be estimated reliably. If a reliable estimate cannot be made the value
of the goods or services is determined indirectly by reference to the fair value of the equity instrument granted.
Transactions with employees and others providing similar services are measured by reference to the fair value at
grant date of the equity instrument granted.
Options issued to Key Management Personnel during the year are outlined in the remuneration report.
The following table illustrates the number (No.) and weighted average exercise prices of and movements in unlisted
share options issued during the year in respect of share based payments:
Outstanding at the beginning of the year
4,400,000
15 cents
No.
2018
Weighted average
exercise price
No.
2017
-
Weighted average
exercise price
-
Granted during the year
26,439,848
37.24 cents
4,400,000
15 cents
Exercised during the year
(4,400,000)
15 cents
Expired/cancelled during the year
-
-
Outstanding at the end of the year
26,439,858
37.24 cents
Exercisable at the end of the year
26,439,858
37.24 cents
-
-
4,400,000
4,400,000
-
-
15 cents
15 cents
Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognised during the period as part of employee
benefit expense were as follows:
Sign on fee for directors, issued as shares
1,525,000
1,100,000
Consolidated
Group
Consolidated
Group
2018
$
2017
$
Performance rights directors
Performance rights employees
Share options directors
Share options employee
Total key management personnel
406,546
62,545
172,302
6,393
-
-
-
-
2,172,786
1,100,000
Page 56
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
Other information
The Company issued 5,439,858 options to advisors in the year to 30 June 2018. The options are exercisable at 45.38
cents per share with an expiry date of 31 January 2021. The options were valued at $555,930 using the Black and
Scholes method using the following variables: a) share price at date of issue 21.5 cents, government bond rate to
maturity 2% and share price volatility of 100%. The cost is being amortised over the period to expiry with $77,212
expensed in the year ended 30 June 2018.
24. RECONCILIATION OF NET CASH USED IN OPERATING ACTIVITIES TO LOSS AFTER INCOME
TAX
Profit/(loss) after income tax
Depreciation
Exploration and project expenditure written off
Share based payments
Project written off
Provision for diminution on value of investments
Unrealised foreign exchange gain
Non-cash fee received on entering Novo Resources Corp. JV
Loss/(profit) on sale of investments
Changes in assets and liabilities during the financial period:
Increase in receivables
Increase in trade and other payables
Net cash outflow from operating activities
Consolidated
2018
$
Consolidated
2017
$
12,073,913
10,406
202,445
2,339,999
-
316,087
(172,206)
(15,037,990)
(3,552,995)
(2,178,504)
2,000
182,910
1,272,000
100,000
-
-
-
4,539
(288,406)
671,715
(3,437,032)
(515,017)
136,766
995,304
Non cash financing and investing activities
During the year the Company acquired Hardrock Resources Pty Limited and Elysian Resources Pty Limited for a
consideration which included 25,000,000 Artemis Shares at a deemed price of 28 cents per share and 8,000,000
shares at a deemed price of 21.5 cents per share.
Page 57
25. PARENT ENTITY DISCLO SURES
(a) Financial position
Total Current Assets
Total Non-current assets
Total Assets
Total Current Liabilities
TOTAL LIABILITIES
NET ASSETS
EQUITY
Share Capital
Reserves
Accumulated losses
TOTAL EQUITY
(b) Reserves
Share based payment reserve
(c) Financial performance
Profit/(Loss) for the year
Other comprehensive income
Total comprehensive income
(d) Commitments
Exploration commitments
Not later than 12 months
Between 12 months and 5 years
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 30 JUNE 2018
2018
$
28,471,293
36,635,439
65,106,732
6,496,174
6,496,174
2017
$
1,051,044
8,818,201
9,869,245
3,945,132
3,945,132
58,610,558
5,924,113
79,127,087
724,999
(21,241,528)
58,610,558
39,067,554
172,000
(33,315,441)
5,924,113
724,999
172,000
12,073,913
-
12,073,913
(2,191,740)
-
(2,191,740)
81,900
68,250
150,250
81,900
150,250
232,150
26. SIGNIFICANT AFTER BALANCE DATE EVENTS
Subsequent to year end the Company repaid US$964,284 of the convertible note.
Other than as outlined above there are no matters or circumstances that have arisen since the end of the financial
period that have significantly affected or may significantly affect the operations of the consolidated entity, the
results of those operations, or the state of affairs of the consolidated entity in future financial years.
Page 58
ARTEMIS RESOURCES LIMITED
DIRECTORS’ DECLARATION
Directors’ Declaration
The Directors of the Company declare that:
1.
the financial statements and notes, as set out on pages 32 to 58, are in accordance with the Corporations
Act 2001 and:
a. comply with Accounting Standards which, as stated in accounting policy Note 1 to the financial
statements, constitutes compliance with International Financial Reporting Standards (IFRS); and
b. give a true and fair view of the financial position as at 30 June 2018 and of the performance for
the period ended on that date of the Company and Consolidated Group;
2.
3.
in the Directors’ opinion there are reasonable grounds to believe that the Company will be able to pay its
debts as and when they become due and payable; and
the Directors have been given the declarations required by s295A of the Corporations Act 2001 from the
Chief Executive Officer and Chief Financial Officer.
This declaration is made in accordance with a resolution of the Board of Directors.
Edward Mead
Director
28 September 2018
Page 59
ARTEMIS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 80 107 051 749
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
ARTEMIS RESOURCES LIMITED
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Artemis Resources Limited and Controlled Entities (the Group), which
comprises the consolidated statement of financial position as at 30 June 2018, the consolidated statement
of profit or loss, the consolidated statement of comprehensive income, the consolidated statement of
changes in equity and the consolidated statement of cash flows for the year then ended, and notes
comprising a summary of significant accounting policies and other explanatory information, and the directors’
declaration.
In our opinion:
a.
the accompanying financial report of Artemis Resources Limited and Controlled Entities is in
accordance with the Corporations Act 2001, including:
(i)
giving a true and fair view of the Group’s financial position as at 30 June 2018 and of its
financial performance for the year then ended; and
(ii)
complying with Australian Accounting Standards and the Corporations Regulations 2001; and
b.
the financial report also complies with International Financial Reporting Standards as disclosed in
Note 2.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under those
standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Report section
of our report. We are independent of the Group in accordance with the auditor independence requirements
of the Corporations Act 2001 and the ethical requirements of the Accounting Professional and Ethical
Standards Board’s APES 110: Code of Ethics for Professional Accountants (the Code) that are relevant to
our audit of the financial report in Australia. We have also fulfilled our other ethical responsibilities in
accordance with the Code.
We confirm that the independence declaration required by the Corporations Act 2001, which has been given
to the directors of the company, would be in the same terms if given to the directors as at the time of this
auditor’s report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Material Uncertainty Related to Going Concern
We draw attention to Note 1 in the financial report, which indicates that the Group had net operating cash
outflows of $3,437,032 during the year ended 30 June 2018. As stated in Note 1, these events or conditions,
along with other matters as set forth in Note 1, indicate that a material uncertainty exists that may cast
significant doubt on the Group’s ability to continue as a going concern. Our opinion is not modified in respect
of this matter.
SYDNEY · PENRITH · MELBOURNE · BRISBANE · PERTH · DARWIN
Liability limited by a scheme approved under Professional Standards Legislation
www.hallchadwick.com.au
ARTEMIS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 80 107 051 749
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
ARTEMIS RESOURCES LIMITED
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in our
audit of the financial report for the year ended 30 June 2018. These matters were addressed in the context
of our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide a
separate opinion on these matters.
Key Audit Matter
How Our Audit Addressed the Key Audit Matter
Accounting treatment of exploration expenditure in accordance with AASB 6 ‘Exploration for and
Evaluation of Mineral Resources’
Refer to Note 8 “Exploration, Evaluation and Development”
Artemis Resources Limited’s accounting
treatment of exploration expenditure is to
capitalise such costs in accordance with AASB
6 "Exploration for and Evaluation of Mineral
Resources".
We considered this to be a key audit matter
due to its materiality to the financial report.
Our procedures included amongst others:
• Selecting material capitalised exploration
expenditure to verify such expenditure had met the
capitalisation criteria as prescribed in AASB 6.
• Obtaining and reviewing tenement titles to verify
existence and ensure the group is still exploiting the
areas of interest.
• Conducting a review of any impairment indicators to
assess the carrying value of capitalised exploration
expenditure
• Confirming the company is still in the development
phase for the relevant areas
Accounting for Share Based Payments in accordance with AASB 2 “Group and Treasury Share
Transactions”
Refer to Note 23 “Share based payments”
Artemis Resources Limited issued a number of
share based payments during the year. These
are
share-based
classified by the Group as an equity settled
share base payment transaction.
transactions
payment
The accounting for share-based payments was
a key audit matter because the expense
recognised incorporates a judgmental option
value. The group valued the options, using the
Black Scholes model, where inputs such as
volatility, dividend yield and risk- free rate
require judgment. We considered this to be a
key audit matter due to its materiality to the
financial report.
Our procedures included amongst others:
• Reviewing the share price of the share-based
payment and compared this to the fair value of the
share price on the relevant date
• Compared the terms and conditions for a sample of
the options issued during the financial year included
in the expense calculations as agreed by the board
• Assessed the reasonableness of the fair value
calculation through reviewing the calculation using
the Black Scholes Model
• Obtaining the group expert’s options valuation report
and assessed the reasonableness of selected inputs
used in the valuation of the share options using
available supporting data.
• Reviewing the share and options register to assess
completeness and to ensure correct recognition and
measurement in accordance with AASB 2
ARTEMIS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 80 107 051 749
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
ARTEMIS RESOURCES LIMITED
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information included
in the Group’s annual report for the year ended 30 June 2018, but does not include the financial report and our
auditor’s report thereon. Our opinion on the financial report does not cover the other information and accordingly
we do not express any form of assurance conclusion thereon. In connection with our audit of the financial report,
our responsibility is to read the other information and, in doing so, consider whether the other information is
materially inconsistent with the financial report or our knowledge obtained in the audit or otherwise appears to
be materially misstated. If, based on the work we have performed, we conclude that there is a material
misstatement of this other information, we are required to report that fact. We have nothing to report in this
regard.
Responsibilities of the Directors for the Financial Report
The directors of the company are responsible for the preparation of the financial report that gives a true and fair
view in accordance with Australian Accounting Standards and the Corporations Act 2001 and for such internal
control as the directors determine is necessary to enable the preparation of the financial report that gives a true
and fair view and is free from material misstatement, whether due to fraud or error. In preparing the financial
report, the directors are responsible for assessing the ability of the Group to continue as a going concern,
disclosing, as applicable, matters related to going concern and using the going concern basis of accounting
unless the directors either intend to liquidate the Group or to cease operations, or have no realistic alternative
but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free from
material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance
with the Australian Auditing Standards will always detect a material misstatement when it exists. Misstatements
can arise from fraud or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional judgement
and maintain professional scepticism throughout the audit. We also:
–
–
–
–
Identify and assess the risks of material misstatement of the financial report, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is
sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material
misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve
collusion, forgery, intentional omissions, misrepresentations, or the override of internal control
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we
conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to
the related disclosures in the financial report or, if such disclosures are inadequate, to modify our opinion.
Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group to cease to continue as a going concern.
ARTEMIS RESOURCES LIMITED
AND CONTROLLED ENTITIES
ABN 80 107 051 749
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS
ARTEMIS RESOURCES LIMITED
–
–
Evaluate the overall presentation, structure and content of the financial report, including the disclosures,
and whether the financial report represents the underlying transactions and events in a manner that
achieves fair presentation.
Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business
activities within the Group to express an opinion on the financial report. We are responsible for the
direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.
We communicate with the directors regarding, among other matters, the planned scope and timing of the audit
and significant audit findings, including any significant deficiencies in internal control that we identify during our
audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may reasonably
be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most significance
in the audit of the financial report of the current period and are therefore the key audit matters. We describe
these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or
when, in extremely rare circumstances, we determine that a matter should not be communicated in our report
because the adverse consequences of doing so would reasonably be expected to outweigh the public interest
benefits of such communication.
Report on the Remuneration Report
We have audited the remuneration report included in pages 9 to 15 of the directors’ report for the year ended
30 June 2018. The directors of the company are responsible for the preparation and presentation of the
remuneration report in accordance with Section 300A of the Corporations Act 2001. Our responsibility is to
express an opinion on the remuneration report, based on our audit conducted in accordance with Australian
Auditing Standards
Auditor’s Opinion
In our opinion, the remuneration report of Artemis Resources Limited, for the year ended 30 June 2018, complies
with s 300A of the Corporations Act 2001.
Hall Chadwick
Level 40, 2 Park Street
Sydney, NSW 2000
DREW TOWNSEND
Partner
Dated: 28 September 2018
ADDITIONAL INFORMATION FOR LISTED COMPANIES
AS AT 15 SEPTEMBER 2018
The following additional information is required by the Australian Securities Exchange pursuant to Listing Rule
4.10.
a. Distribution of Shareholders
Spread of Holdings
NIL holding
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
Over 100,000
TOTAL ON REGISTER
Holders
0
185
1.020
784
1.969
481
4,439
Securities
0
57,423
3,207,706
6,388,201
74,789,218
548,851,222
633,293,770
% of Issued Capital
0.00%
0.01%
0.51%
1.01%
11.81%
86.67%
100.00%
b.
The number of shareholders who hold less than a marketable parcel is 617.
c.
Substantial shareholders
The names of the substantial shareholders in the Company, the number of equity securities to which
each substantial shareholder and substantial holder’s associates have a relevant interest, as disclosed
in substantial holding notices given to the Company are:
Exchange Minerals FZE
Veni Vidi Vici Limited
No of shares
50,643,300
36,387,584
%
8.00%
5.75%
Page 64
ADDITIONAL INFORMATION FOR LISTED COMPANIES
AS AT 15 SEPTEMBER 2018
d.
Twenty largest holders ordinary shares
Page 65
Rank Holder Name Designation Securities % *1HSBC CUSTODY NOM AUST LTD56,526,9748.93%*2PERSHING AUST NOM PLINDIAN OCEAN A/C47,614,7117.52%*3CITICORP NOM PL41,594,0906.57%4VENI VIDI VICI LTD36,387,5845.75%5J P MORGAN NOM AUST LTD31,209,3274.93%6NATIONAL NOM LTD25,042,5943.95%7BNP PARIBAS NOM PLIB AU NOMS RETAILC20,625,8373.26%8SORRENTO RES PL16,375,0002.59%9SORRENTO RES PLACN 622 635 483 PL16,375,0002.59%*10AKTIENGESELLSCHAFT D B12,500,0001.97%*11MERRILL LYNCH AUST NOM PL10,860,9281.71%12FZE CASS9,885,0001.56%13MAHARAJAPURAM V S9,500,0001.50%14BNP PARIBAS NOMS PLDRP9,416,5201.49%15HUGHES JAY EVAN DALEINKESE FAM A/C7,500,0001.18%16INKESE PL6,000,0000.95%17MAKTOUM SHEIKH M H M J A5,000,0000.79%*18D & K CORPS INV PL5,000,0000.79%19VENKATARAMAN SRIDHAR4,805,9660.76%20HSBC CUSTODY NOM AUST LTD4,798,5920.76%TOP 20 TOTAL377,018,12359.55%*Denotes merged holders.Note: All holders are included in the report.ARTEMIS RESOURCES LTDTop 20 ListingDate - 16/09/2018 Time - 17.23.44 ADDITIONAL INFORMATION FOR LISTED COMPANIES
AS AT 15 SEPTEMBER 2018
OTHER DETAILS
1.
Address and telephone details of entity’s registered and administrative office
The address and telephone details of the registered and administrative office in Australia are:
Level 1,
11 Ventnor Avenue
West Perth WA 6005
Telephone: +(612) 6319 0000
2.
Address and telephone details of the office at which the register of securities is kept
The address and telephone of the office at which a register of securities is kept:
Security Transfer Registrars Pty Limited
770 Canning Highway
Applecross, Western Australia 6153
3.
4.
5.
Stock exchange on which the Company’s securities are quoted
The Company’s listed equity securities are quoted on the Australian Securities Exchange.
Review of Operations
A review of operations is contained in the Review of Operations report.
On market buy-back
There is currently no on-market buy-back.
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CORPORATE DIRECTORY
ARTEMIS RESOURCES LIMITED
ABN 80 107 051 749
BOARD OF DIRECTORS
David Lenigas (Executive Chairman)
Sheikh Maktoum Hasher Al Maktoum (Non-executive Director)
Edward Mead (Executive Director)
Alex Duncan-Kemp (Executive Director)
CHIEF EXECUTIVE OFFICER
Wayne Bramwell
COMPANY SECRETARY
Guy Robertson
REGISTERED OFFICE
Level 1,
11 Ventnor Avenue
West Perth WA 6005
Ph: (08) 6319 0000
SHARE REGISTRY
Security Transfer Registrars Pty Limited
770 Canning Highway
APPLECROSS WA 6153
Ph: (08) 9315-2333
Fax: (08) 9315-2233
www.securitytransfer.com.au
AUDITORS
Hall Chadwick
WEBSITE
https://artemisresources.com.au
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